State Governors' Medicaid Plan

US state governors have offered an alternative Medicaid reform plan thatcuts less and gives states more power over the program. They have reject the Clinton Administration plan to put annual spending caps on Medicaid, and instead call for modest premiums for the poor who use the program. Unlike the Clinton plan, the governors' proposal does not include funding to help expand health care to about half the 10 million US children without health insurance.

Utah Governor Mike Leavitt told the Senate Finance Committee that while the White House plan does drive change, all the changes are bad. The National Governors Association plan calls for $8 billion in five-year Medicaid savings, compared to $22 billion in the Clinton plan. The NGA feels it could achieve some savings if Congress gave it more power to manage Medicaid. The plan would have states set up managed care plans for the poor without special waivers, reduce the amount they must pay some clinics and possibly require Medicaid recipients to pay a small monthly premium. The NGA also wants to repeal a law it feels forces high payments for institutional care.

President Clinton has proposed many of these changes but he does not support co-payments. The NGA could not agree on aid to hospitals that serve many of the poor; Pres Clinton wants to cut these payments by $15 billion. Nevada Governor Bob Miller told the committee that the cap would discourage states from expanding benefits, and that it might not be possible to meet the White House goal of enrolling three million children in Medicaid who are eligible but not receiving aid.