Plans To Turn Medicaid Over To US States

Republican governors have drafted a plan to turn control of Medicaid over to the states by giving them lump sum payments of about $90 billion now being spent on care for the poor. Additionally, Illinois Governor Jim Edgar, head of the Republican Governors' Association task force on Medicaid reform, has also suggested capping the growth of federal spending at a level well below Medicaid's current 10% yearly growth rate.

While he did not give any further details on the cap, aides said that Republican governors and Senate leaders have discussed ceilings of 4%-6%. Eliminating federal directives on Medicaid eligibility and services (entitlements) is also being discussed, according to an aide to Governor Edgar, who added that it would be up to the states to determine how to meet any new guidelines. He denies that capping the federal share and eliminating federal standards would lead to cuts in services or tightened eligibility.

The Republican plan would have Medicaid programs subject to the same limits in all states, with possible adjustments for population growth and with the cap applying to the total cost of the state Medicaid program, not the per capita cost. The Republican governors would not have states continue spending their own money on Medicaid, but Republican senators have insisted on this.