In a letter sent today to President Bush, Senate minority leader Thomas Daschle (D-S.D.) opposes the administration's Medicaid block-grant proposal and asks the president to consider instead short-term fiscal relief to struggling states.
"A federal short-term investment in this area will help states mitigate devastating cuts in Medicaid services, provider payments and ultimately, jobs," Daschle writes in the missive.
Daschle's letter contends that at least one million Americans are at risk of becoming uninsured as states cope with nearly $80 billion in deficits that have strained their Medicaid programs.
Bush's proposed 2004 budget is designed to give states more flexibility by offering them $3.2 billion in federal funds if they participate in a plan to voluntarily redesign their programs for nonmandatory populations. Services for those patients covered at the states' discretion account for about one-third of the Medicaid budget.
Under the Bush plan, a total $12.7 billion would be available to states over seven years and would be received in the form of fixed federal allotments rather than matching funds. States also would be allowed to change Medicaid rules, eligibility requirements and benefits without the approval of federal waivers.
Daschle says a better solution is a bipartisan Senate bill that would provide $20 billion to help governors immediately. The bill, S 138, is co-sponsored by Sen. John Rockefeller (D-W.Va.) and Sen. Susan Collins (R-Maine). Daschle notes that a similar proposal passed the Senate last summer in a 75 to 24 vote.
"In contrast, the Administration proposal to loan states $3.2 billion this year--only if they agree to accept a capped, block grant for some or all of the Medicaid program--is the wrong prescription for both our economy and our health care system," Daschle says. "States will not receive federal funds based on the needs of the people in their state and will see the value of their allotment diminish as they are forced to pay back the loan in later years."
Meanwhile, HHS Administrator Tommy Thompson is expected to ask the National Governors Association, meeting next week in Washington, to endorse Bush's Medicaid reform proposal. The New York Times reported Thursday that Thompson says the money is not a lump-sum block grant but would increase with medical costs and other factors.
Daschle argues that Congress could help the administration craft "appropriate" Medicaid reform while maintaining beneficiaries' access to services. While admitting states would gain flexibility in running their programs under the Bush plan, he says it would come at the price of inadequate federal funding and the elimination of some federal beneficiary protections.
"It's clear that the proposal would lead to cuts in eligibility and services for many of the most vulnerable Americans and would not provide adequate short-term relief," Daschle says.