Senate, House at odds over big Medicaid cuts

WASHINGTON -- The U.S. House and Senate in March tussled over proposed 2006 Medicaid cuts, sending starkly different proposals to committee. The Senate voted 52 to 48 in favor of a budget amendment that would take $14 billion in proposed Medicaid cuts off the table. The House, however, narrowly adopted a budget framework that included cutting $20 billion from the program. The proposals will have to be reconciled during the continuing budget battle. President Bush originally proposed $60 billion in cuts over 10 years. Although no consensus was reached in the original proposals, industry leaders said the Senate's actions could be promising for the overall health of the program at the state level. "Right now, the main concern is the cost shift," said John Gallagher, vice president of government relations for Waterloo, Iowa-based VGM. "Where are the cuts going to come from at the state level when they lose federal dollars and have to pick up some of the programs and fund them?" Gallagher said a state's reliance on federal money to fund Medicaid varies based on several factors, including size and demographics. A rule of thumb, however, is that as much as 25% of the state's program may be funded by the federal government. "So if you are cutting even a twentieth of that, that's a big chunk, especially in tough times when Iowa, for example, is trying to figure out how to fund education," he said. In place of Medicaid cuts, the Senate passed Sen. Gordon Smith's, R-Ore., amendment establishing a commission to work with the Bush administration and the nation's governors to explore policy changes to slow the program's growth. The 23-member bipartisan commission would review the long-term goals, population served, financial sustainability, and quality of care provided by Medicaid and make recommendations for changes to the program for FY 2007. On the House side, Rep. Heather Wilson, R-N.M., also introduced a bill to establish a bipartisan commission on Medicaid. Her bill, H.R. 985, has 135 co-sponsors and bipartisan support, said Kay Cox, CEO of AAHomecare. "Both the House and Senate are saying lets study the issue more carefully before we make drastic cuts," said Cox. "They realize that this issue needs to be driven by health policy and by what is in the best interest of the patient, not by the budget deficit." Unfortunately, the juxtaposition of the Senate and House proposals could mean the issue will never come out of conference, said Gallagher. "It's very disappointing to us what's going on over there [in the Senate]," Rep. Jim Nussle, R-Iowa, told reporters. "I hate to be a naysayer about this, but I'm not sure how we can get an agreement with the Senate." Gallagher planned to meet with Nussle, who is also the House Budget Committee Chairman, in March to talk about the impact the proposed cuts would have at the state level. "What we have to do as an industry, and what a lot of the state associations are trying to do, is point to the fact that keeping health care in the home is a part of the solution, not part of the problem," he said, "We have to do a better job of selling the fact that we are a cost saving solution, not a cost cutting solution."