Republican governors are trying to breathe new life into the writing of a GOP Medicaid reform plan.
GOP leaders had set a deadline of this week to finish work on a plan to overhaul the nation's Medicaid system and introduce legislation in Congress.
Meanwhile, the Clinton administration recycled its plan to reduce Medicaid spending by $59 billion between now and 2002 by capping per-beneficiary spending.
Republican governors continue to push for some of the most controversial aspects of the plan.
However, Democratic governors have made it clear they believe Congress should delete some parts of the plan and are upset that Republican governors gave Congress the go-ahead to release a plan without their consent.
Among the most contentious issues is one that would reduce the amount of funds states must contribute to Medicaid to receive federal matching funds to 80 cents per federal dollar. States now must contribute a dollar per federal dollar.
GOP governors say the change is needed for more budget flexibility, but Democrats have said it amounts to a raid on federal Medicaid funds.
The governors' disagreements make passage of a Medicaid reform plan, already a long shot, even less likely, many observers said.
According to several governors, gridlock on Medicaid reform in Washington will create problems in many state budgets.
New York, which has one of the earliest budget deadlines in the nation would be the hardest hit. However, other states also would be affected.
For example, Wisconsin Gov. Tommy Thompson, a Republican, said recently that without Medicaid reform, his state will not be able to implement a planned cost-sharing program with beneficiaries. Thompson said it would extend coverage to 20,000 working poor in Wisconsin.
"There are a number of states that are relying on Medicaid savings in their budgets," said Carl Volpe, a healthcare analyst for the National Governors' Association. "States will still be able to use a smaller number of state dollars for Medicaid. But in the absence of Medi-caid reform, they will receive lower federal funds."
Volpe added that such a scenario could lead to reduced benefits or lower provider payments.
The White House has said it opposes the governors' plan. Last week, the administration released its own Medicaid reform plan as part of its fiscal 1997 budget.
The proposal is essentially the same as the one released last year by the administration and would cap per-capita Medicaid payments but would not put a cap on overall Medicaid spending. Administration officials say such a plan would better account for unexpected increases in Medicaid populations in states.