Peter Welch Calls for Plans to Fund Medicaid Program

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(Host) Senate President Pro Tempore, Peter Welch is calling on the Douglas administration to develop realistic short-term and long-term plans to fund the state’s Medicaid program. Welch says it’s now clear that the federal government is not going to help Vermont solve its immediate funding problems. He says any long-term plan to save Medicaid must be part of a larger health care reform initiative.

VPR’s Bob Kinzel reports

(Kinzel) The Douglas Administration was hoping to get federal approval for a plan that would give the state a lot more flexibility in using Medicaid funds. In return the state would agree to accept a capped rate of increase for the program in the future.

Late last week, the Bush Administration told the state of Vermont that it’s rejected elements of this block grant approach, but it would consider matching state funds for other Medicaid services as long as the proposal can ensure ” cost neutrality.”

Senator Welch says it’s now apparent that the waiver will not help the state reduce a projected eighty-million dollar deficit in next year’s Medicaid program. And Welch says it’s clearly time for the governor and lawmakers to look at other options for the short term.

(Welch) “I think we have to go to plan B and I think we need the governor to go to plan B. And plan B just has to deal with the reality of the Medicaid program as it is with the numbers in our budget that we have, and to not be postponing engagement on that issue because we’re speculating about the possibility of a global budget that won’t materialize.”

(Kinzel) Welch says it’s impossible to solve the Medicaid problem in a vacuum. He wants it to be considered in a larger debate over comprehensive health care reform.

(Welch) “This is an extraordinarily important fiscal decision. The future of our budget and the fiscal health of this state depends on what the governor does in his negotiations with the federal government. And if we get this one wrong it’ll be catastrophic financially for the state of Vermont.”

(Kinzel) Administration Secretary Michael Smith is rejecting Welch’s approach. Smith says the governor’s new waiver plan will still save the state roughly sixty percent of its original projections – an amount that could total one-hundred and eighty-million dollars over the next five years.

(Smith) “I think it’s a realistic plan. If there’s other plans that are out there, I’d like to see ’em, in terms of how we’re going to do this. But we’ve got a plan that works – that meets our objectives. And that’s the important thing here – it meets our objectives. It doesn’t do the massive cuts that other states are doing and doesn’t ruin the state’s economy by raising taxes every year.

(Kinzel) Smith says the Administration will formally submit the new waiver plan to the federal government by the middle of this month. And he says that most elements of the proposal will require legislative approval.

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

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