Congress Faces Pressure on Medicaid Cuts

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Lawmakers have just over a week to cut $10 billion from the fast-growing Medicaid health program for the poor. Opponents say the program, and its beneficiaries, cannot afford the loss.

MELISSA BLOCK, host:

Congress returned to Washington today with hurricane victims and the Supreme Court at the top of the agenda. But lawmakers are facing another deadline. They have just over a week to cut $10 billion from the fast-growing Medicaid health program for the poor. NPR's Julie Rovner reports.

JULIE ROVNER reporting:

Medicaid is the nation's largest source of health insurance; it serves some 53 million Americans. And the number of people on Medicaid has been rising for most of this decade. Last week Census Bureau numbers showed that fewer employers are providing health insurance to their workers, and the increase in Medicaid coverage was the only reason the number of uninsured didn't rise even more. Still, in an effort to address the federal deficit, Congress promised to cut $10 billion out of Medicaid, and they have to do it by September 16th. Former Maine Governor Angus King co-chairs a commission that's recommended how to achieve those savings. He says its recommendations shouldn't be called cuts.

Former Governor ANGUS KING (Independent, Maine; Commission Co-chair): In no case are these cuts in absolute dollars from current levels. What we're really doing is reducing the projected growth from 7.4 percent a year to 7.2 percent.

ROVNER: The commission's recommendations include changing the way Medicaid pays for prescription drugs and making it harder for middle-class seniors to qualify for Medicaid-paid nursing home care by transferring assets to their children. King says the commission was careful to protect actual medical benefits.

Mr. KING: We wanted in all cases, as far as humanly possible, to avoid direct impact on beneficiaries. That was a question that was asked over and over during the deliberations: `How will this affect beneficiaries?'

ROVNER: But some advocates for the poor say the commission failed on that count. Kathleen Stoll is health policy director for the consumer group Families USA. She says the commission's proposal that some beneficiaries make co-payments for their prescription drugs flies in the face of King's claim that the reductions wouldn't hurt Medicaid patients.

Ms. KATHLEEN STOLL (Health Policy Director, Families USA): Those are older people. They're sicker people. They're very poor people. And he's asking that they pay more for prescription drugs? It's something they can't afford to do.

ROVNER: Stoll also says that cutting Medicaid now would be a mistake, particularly in light of last week's census figures on the uninsured.

Ms. STOLL: So, really, Medicaid offset what we're seeing in the employer side, the deterioration of job-based coverage. If we start cutting Medicaid now, really slashing Medicaid, we're going to see many, many more uninsured and see that rate grow even faster in the future.

ROVNER: The political fallout from those left homeless and jobless by Hurricane Katrina has bolstered opposition to the cuts even more. Oregon Democratic Senator Ron Wyden says their plight is a test of how the nation treats its most vulnerable citizens.

Senator RON WYDEN (Democrat, Oregon): I always want to work in a bipartisan way. I've done it repeatedly in health. But this is not an issue on which I'm going to give one inch. It is a non-starter to cut Medicaid right now.

ROVNER: But former Governor King says if Medicaid's rapid growth isn't slowed, beneficiaries will suffer even more.

Mr. KING: If we don't do something about the long-term financial sustainability of Medicaid, the result in state after state and at the federal level is going to be to cut the rolls. And instead of having a lot of people with 98 percent of what they have, you're going to have some people with 100 percent and some people with zero.

ROVNER: Congressional Republicans so far say they plan to proceed as scheduled, but like everything else in Congress right now, that's subject to sudden change. Julie Rovner, NPR News, Washington.

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