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Republican group seeks to scrap proposed $20 billion Medicaid cut

WASHINGTON—In the latest blow to White House proposals to cut the federal budget deficit in half by 2009, 44 moderate Republicans have asked the chairman of the House of Representatives Budget Committee to reject $20 billion in proposed cuts to Medicaid, the embattled national health plan for the poor, elderly and disabled.

Instead of the deep cuts called for in the House's 2006 budget resolution, the lawmakers, led by Rep. Heather Wilson, R-N.M., want to create a bipartisan commission to recommend reforms to the program. The Senate passed a similar request in a budget resolution March 17.

It is unclear whether Wilson's proposal, outlined in an April 13 letter to Budget Committee Chairman Jim Nussle, R-Iowa, will succeed.

But Wilson's push to retain Medicaid funding reflects a growing division within the GOP on how to address the program's ever-expanding annual price tag, which is expected to exceed $316 billion in fiscal 2005. Of that, the federal government will pay $182 billion and states will pay $134.5 billion, according to program actuaries.

The Bush administration argues that states can trim Medicaid spending by $60 billion over 10 years by cutting program fraud, waste and abuse.

Although state officials are less optimistic, Medicaid has been plagued by these problems, much like some other big federal programs. Government investigators say Medicaid providers bilk millions from the program each year for unnecessary services—those that are never performed and some that the program isn't supposed to cover.

In addition, Medicaid frequently overpays for prescription drugs, and states incorrectly bill the federal government for more than its share of program costs, according to the Department of Health and Human Services.

Although Medicaid is now the nation's largest health-care program, its vast expansion has caused confusion about the program, and that has kept discussions about Medicaid spending in the background while proposed changes to Medicare and Social Security have provoked passionate public debates.

"If the president says he's going to drop 1 million Medicare recipients, everybody would say, `Gee, that's someone's mom and dad' or `Those are people on Social Security,''' said Dr. Robert Blendon, a professor of health policy at Harvard University's School of Public Health. "But with Medicaid there's some confusion. It's not instantly clear who would be affected because, in all fairness, the program is five or six different pieces."

The fact that Medicaid goes by different names in different states compounds the confusion. "In Wisconsin, it's called `BadgerCare,''' Blendon said. "In California, it's `Medi-Cal.' In Tennessee, it's `TennCare.'"

"I've been amazed at how much people inside Washington don't really understand what's driving Medicaid (costs)," said Barbara Coulter Edwards, Ohio's Medicaid director and the vice chair of the National Association of State Medicaid Directors.

Medicaid was created 40 years ago this July to provide health care mainly to families on welfare. But population growth, economic recessions and federal mandates to improve and expand coverage have fueled enrollment.

Some 38 million out of today's 53 million Medicaid recipients are low-income children and adults, but more than 70 percent of Medicaid spending goes to pay for long-term medical and nursing-home care for the program's 15 million seniors and disabled patients. The program paid some of the cost of Terri Schiavo's care in a Florida hospice.

A recent report compiled by Vernon K. Smith, principal of Health Management Associates, a Lansing, Mich. consulting firm, found that Medicaid:

_Covers more than 25 million (25 percent) of the nation's children.

_Pays for 37 percent of U.S. childbirths (more than 1.5 million).

_Pays for long-term care for nearly 14 million seniors and people with disabilities.

_Pays for two-thirds of America's nursing-home patients, most of whom had been middle-class seniors before the cost of health care drove them into poverty.

_Pays for 55 percent of all health care for people with AIDS/HIV.

_Subsidizes $13 billion a year worth of care for community health centers and other services for the uninsured.

_Fills coverage gaps for low-income Medicare recipients by paying their insurance premiums, deductibles and prescription drug costs until 2006, when the Medicare drug plan begins. In fact, 42 percent of all Medicaid spending is for poor seniors who qualify for Medicare and Medicaid, according to the National Governors Association.

For more information about Medicaid, go to the Kaiser Commission on Medicaid and the Uninsured at

Or go to the Centers for Medicare & Medicaid Services' consumer information Web site at


(c) 2005, Knight Ridder/Tribune Information Services.

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