Governors wary of Bush's plan to reform Medicaid

WASHINGTON — Governors and the Bush administration agreed on Tuesday to intensify negotiations on ways to clamp down on Medicaid costs after four days of talks sputtered to an inconclusive end.

Mike Leavitt, the secretary of health and human services, said he saw eight to 10 "areas of potential common ground" with the governors.

Gov. Mark Warner of Virginia, a Democrat who is chairman of the National Governors Association, said, "We have a growing consensus on some principles" but no agreement on details. The sentiment of most governors is, "Let's plunge ahead" with further negotiations, he said.

Medicaid provides health insurance for more than 50 million low-income people, pays for more than one-third of all births and finances care for two-thirds of nursing home residents. The cost of the program, financed jointly by the federal government and the states, shot up 63 percent in the past five years. For more than two decades, federal and state officials have been engaged in a tug-of-war over who should pay how much of the cost.

"If we don't do something, people in this country who are currently served by Medicaid will lose their health coverage," Leavitt told the National Governors Association on Tuesday at the end of its four-day winter meeting.

After conversations with most governors, Leavitt said he saw agreement emerging on these points:

• Medicaid is "overpaying for prescription drugs."

• Parents should not be able to obtain Medicaid coverage for nursing home care by voluntarily impoverishing themselves and transferring assets to their children.

• Governors should be able to charge co-payments to Medicaid recipients, based on their income, and should be able to manage care and costs by using the tools available to private insurers.

• State officials should have more freedom to decide which benefits will be provided.

• Medicaid should recognize home and community-based care as "a preferred alternative" to nursing homes.

However, interviews with numerous governors suggest that the consensus described by Leavitt does not exist.

Gov. James E. Doyle of Wisconsin, a Democrat, said the Bush administration appeared to believe that millionaires were exploiting Medicaid to gain coverage of nursing home care.