Feds May Pass Budget Woes On to States A bipartisan group of governors is asking Congress to stop the Bush administration from making them pay a larger portion of Medicaid's costs. The governors say new rules could shift as much as $15 billion over the next five years from the federal government to the states.
NPR logo

Feds May Pass Budget Woes On to States

  • Download
  • <iframe src="https://www.npr.org/player/embed/38248288/38434288" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript
Feds May Pass Budget Woes On to States

Feds May Pass Budget Woes On to States

  • Download
  • <iframe src="https://www.npr.org/player/embed/38248288/38434288" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript

MELISSA BLOCK, host:

The federal government reported today that a decade from now, health care is expected to consume nearly one of every $5 produced by the economy. States are already feeling the pinch.

Medicaid's costs are divided between the federal government and the states, and it's nearly every state's biggest budget item. So, today, a bipartisan contingent of governors came to Capitol Hill. They asked Congress to stop the Bush administration from making them pay an even bigger share of Medicaid's costs.

NPR's Julie Rovner has more.

JULIE ROVNER: It was probably just as well that no one from the Bush administration was there to testify before the House Energy and Commerce Committee, because aside from a handful of committee Republicans, pretty much no one had anything nice to say about the way the administration is handling the Medicaid program.

Here, for example, was Mississippi Republican Governor Haley Barbour, complaining about the administration changing a rule so that states would pay more for care and public hospitals.

Governor HALEY BARBOUR (Republican, Mississippi): We've gotten control of Medicaid spending. Our problem now is every time we get control of spending, the federal government disallows part of our state share. So, we're $90 million in the hole not because haven't controlled spending. We're $90 million in the hole because they've told us this won't count anymore because - part of it, because of public hospitals.

ROVNER: Altogether, the Bush administration has issued a half-dozen Medicaid regulations that would cost state some $15 billion over the next five years. Administration officials say those are costs the federal government shouldn't have to bear. But the governors are united. The states can't afford it, particularly not now with the economy going sour. And it will be the patients who will suffer, said Massachusetts Democrat Deval Patrick, if Congress doesn't step in and block the rules from taking effect.

Governor DEVAL PATRICK (Democrat, Massachusetts): Without your actions, states will be forced to make choices that are more than just unpleasant but wasteful, costly, impractical and ultimately harmful to our common interest and good personal and economic health.

ROVNER: But what many governors want even more from Congress is for it to cancel what the Bush administration did last August regarding SCHIP, the State Children's Health Insurance Program. The action effectively makes it harder for states to cover children higher up the income scale.

Under the directive, starting this August, states can't enroll children in the SCHIP program and families with incomes over 250 percent of the poverty level -that's about $44,000 for a family of three - unless states can prove they already cover nearly all children and families at two times poverty, about $35,000.

Patrick said that change would make a mess of Massachusetts' plan to cover all the state's uninsured residents, and it would also undo an earlier deal Massachusetts made with the Bush administration.

Gov. PATRICK: Indeed, as a practical matter in Massachusetts, this directive would leave thousands of children between 250 and 300 percent of the federal poverty level uninsured while their parents are covered by other features of our federally approved health care reform.

ROVNER: Washington Democratic Governor Christine Gregoire has gone a step further. She and eight other state executives are suing to stop the rule from taking effect. She said the way the federal government is doing the measuring…

Governor CHRISTINE GREGOIRE (Democrat, Washington): No state that I know of will comply with the August 17th guidance. The effect of the rule, intended or otherwise, is to preclude the states from covering these children in low-income households.

ROVNER: Congressional Democrats are sympathetic to the governors' pleas, but to overcome a certain veto, they'll need to convince a majority of Republicans, something they have been, so far, unable to do.

Julie Rovner, NPR News, Washington.

Copyright © 2008 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.