National Governors Association Fails To Agree on Plan To Increase Federal Medicaid Funding

The National Governors Association on Feb. 26 agreed to establish an independent commission on Medicaid reform and urged Congress to offer state Medicaid programs "more flexibility," but the group could not agree on a request for additional federal funding for the programs, CongressDaily/AM reports (Fulton/Wegner, CongressDaily/AM, 2/27). Governors are seeking a temporary increase in federal Medicaid funding to help states address expected budget deficits this year. On Feb. 26, the final session of the NGA's four-day winter meeting, Mississippi Gov. Ronnie Musgrove (D) proposed a plan to ask Congress for a temporary increase in federal Medicaid funding independent of an economic stimulus bill (Fulton, CongressDaily, 2/26). Senate Democrats proposed economic stimulus bills last fall and earlier this year that would have included increased federal Medicaid funding for states, but lawmakers did not approve either bill (Kaiser Daily Health Policy Report, 2/7). The NGA could not agree on Musgrove's plan and referred the proposal to the group's executive committee for additional discussion. Musgrove said that "some governors were wary" of a proposal that would separate Medicaid funding from an economic stimulus bill "because they feared going against the administration," which opposes a temporary increase in federal Medicaid funding for states. The administration has expressed concern that a temporary funding increase "could become permanent" and instead supports a proposal to expand emergency grants through the Department of Labor to allow states to provide health insurance to unemployed workers and their families. Although several governors met on Feb. 26 with administration officials to discuss the issue, Musgrove said that the "dialogue between the governors and the administration was ... limited" (CongressDaily, 2/26).

Lawmaker Doubts
Some congressional lawmakers expressed doubts about Musgrove's proposal. Senate Finance Committee Chair Max Baucus (D-Mont.) questioned whether states would use the increase in federal funding for Medicaid. "States have used Medicaid money for other purposes. All they want is more federal dollars," he said. However, Sen. Charles Grassley (R-Iowa) "expressed more sympathy" for state governors. "Most governors have already had to make tough decisions in last year's budget process, and I think Congress is aware of the difficulty states are experiencing" (CongressDaily/AM, 2/27). The NGA did agree on four Medicaid "legislative priorities" that the group planned to send to lawmakers. The NGA's priorities included:

• Asking Congress for "maximum implementation" of Medicaid waivers;
• Asking Congress for "more flexibility" in establishing cost- sharing programs for non-categorically eligible Medicaid beneficiaries and services;
• Asking Congress for "more flexibility" to develop "optional benefit programs and all benefits" for non-categorically eligible Medicaid beneficiaries;
• Offering support for President Bush's Medicaid prescription drug proposal (CongressDaily, 2/26).