Douglas asks Bush administration for flexibility in Medicaid spending

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(Host) Governor Jim Douglas is urging the Bush administration to give individual states more flexibility concerning the administration of the Medicaid program. Douglas says the proposal will help states like Vermont deal with growing Medicaid expenses.

VPR’s Bob Kinzel reports.

(Kinzel) One of the biggest fiscal issues facing lawmakers in the new legislative session will be finding ways to eliminate a projected $70 million deficit in the state’s Medicaid program. The shortfall is the result of several factors including a reduction in federal funds, increased utilization, higher medical expenses and rising prescription drug costs.

A bi-partisan group of governors, including Governor Jim Douglas, is concerned that the Bush administration later this month will propose further cuts in the Medicaid program as a way to help reduce the federal budget deficit. Douglas says further cuts would be very harmful to states like Vermont:

(Douglas) “Governors around the country feel the way that municipalities do when we put the state budget together here. We don’t want one level of government to solve its budget problems by pushing the challenge onto the next level of government. The growth in the Medicaid program has been very significant in recent years and we need to find ways to rein it in, but we don’t want to do it at the expense of states.”

(Kinzel) Even if the governors are successful in convincing Congress not to cut Medicaid, Douglas acknowledges that it’s unlikely that the federal government is going to significantly increase spending on this program.

Douglas says a number of governors are willing to make a deal. They’ll accept small increases in Medicaid spending if the Bush administration gives them much greater flexibility in determining how to use this money:

(Douglas) “If the federal government’s not going to give us the resources we need in the Medicaid program, then I think it’s important to give us the flexibility we need to run the program in a more cost effective way. For example we have a request pending now for a waiver in our long term care program which, if granted, will allow us to re-deploy Medicaid dollars to keep more people at home for a longer time rather than seeking nursing home care.”

(Kinzel) Douglas says he doesn’t want to cut eligibility for Vermont’s Medicaid programs as a way to reduce the projected deficit but he says it’s likely that some participants of these programs will face higher deductibles, larger co-payments and increased premiums in the coming fiscal year.

For Vermont Public Radio, I’m Bob Kinzel in Montpelier.

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