Governors oppose Medicaid cuts as Senate opens debate

The National Governors Association expressed opposition Wednesday to the 2005 budget resolution that proposed cuts in the Medicaid program as the Senate started debate on the issue. The measure may force states to sharply cut benefits.

"We are writing to express our strong opposition to the inclusion of any Medicaid cuts in the fiscal year 2005 budget resolution that you are now considering," the governors said in a letter to the Senate Budget Committee leadership. "Medicaid funding cuts could add millions more to the ranks of the uninsured and would harm our nation's health care safety net."

Committee Chairman Don Nickles (R-OK) said the measure must not exceed $814 billion in spending. Analysts say President Bush's proposal aims to save $10 billion over five years and $24 billion over 10 years by cracking down on a Medicaid funding mechanism that allegedly allows states to claim more in federal reimbursement than was actually spent at the state level.

In a related development, a coalition of healthcare providers urged the Senate Budget Committee to reject all Medicaid reduction provisions in the 2005 budget resolution. Most of the changes would be in intergovernmental transfers and upper payment limits, both of which have been used often by the skilled nursing community.