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ROBERT SIEGEL, host:

When people in Washington talk about health care, a lot of people in state capitals all over the country hear Medicaid. How big is Medicaid? Well, nationally about 20 percent of the U.S. population is enrolled in Medicaid. All told, we spend about $320 billion on Medicaid and a big share of that cost is paid by the states. To get an idea of what they are facing, we've called upon Governor Jim Douglas of Vermont, who's a Republican, and as of today is chair of the National Governors Association, which is meeting in Biloxi, Mississippi. Welcome to the program.

Governor JIM DOUGLAS (Vermont): Nice to be with you.

SIEGEL: How big is you state's Medicaid population?

Gov. DOUGLAS: Our population is about 24 percent. So, we're above the national average and among the higher ones.

SIEGEL: And how much does Medicaid cost the state of Vermont for those people?

Gov. DOUGLAS: Of course we're a small state, so the numbers may appear small compared to other places, but the total cost of the program is about $1.2 billion, a portion is paid by the state, as you indicated and part by the federal government.

SIEGEL: But as a share of the state budget that you folks in Vermont wrestle with, how big is Medicaid?

Gov. DOUGLAS: Well, nationally, Medicaid is over 20 percent of a state budget and because we're generous and cover a higher percentage in Vermont, it's a little higher than that. And it's growing and that's the real problem. We estimate by the end of the next decade, it will probably be 25 percent on average across the country at least. And unless we do something to control cost, it could approach 30 percent.

SIEGEL: And if you're above average, you could be pushing toward 30 percent in any case, you say.

Gov. DOUGLAS: We could indeed, and that really crowds out all the other responsibilities of state government. In fact, an economist at the University of Vermont concluded some time ago that unless we get these costs under control, after another decade or so, Vermont will only be able to afford education and human services and nothing else.

SIEGEL: I've had a figure quoted to me that of the uninsured, it is thought that perhaps a quarter to a third are really already eligible for some public health program that they haven't enrolled in for one reason or another. They may not know it. If that were the case in Vermont, how many people might that add to your Medicaid rolls?

Gov. DOUGLAS: In fact, in Vermont, we estimate that more than 50 percent of the uninsured are eligible for Medicaid or some other public program. But we have a relatively low rate of uninsured because of the efforts we put in place over the last few years. So our uninsured rate is about seven and a half percent. But there's no question that the majority of people who are uninsured in our state are eligible for public health.

SIEGEL: Do you think that if there were a federal mandate that individuals carry health insurance, that might make a lot of people who are uninsured figure out what they can do and for half of them that would be Medicaid.

Gov. DOUGLAS: I don't really think a mandate is the way to go. We have a mandate in our state, for example, for auto insurance, but more than 10 percent of our drivers don't have it. I think the best way to get people insured is to reduce the cost. I think more Americans would sign up for insurance if it weren't so expensive.

SIEGEL: Do you believe it when you hear President Obama say that he's going to propose a health care bill that will pay for itself?

Gov. DOUGLAS: I think that's the only way that it can be done. The president has an important goal. It's one that I share. I believe that if we improve the health of the population of this country, it's going to be good for us economically. If we can keep more people healthy on the job, not fighting chronic disease, not getting injured or ill, I think it's going to be good for America's economic future.

SIEGEL: Well, Governor Douglas, thank you very much for talking with us about it.

Gov. DOUGLAS: Thank you, Robert.

SIEGEL: That's Governor Jim Douglas of Vermont. As of today, the chair of the National Governors Association, speaking to us from Biloxi, Mississippi where the governors are meeting.

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