Hearing on Medicaid Held to Address States' Perspectives -- California Capitol Hill Bulletin -- Volume 10, Bulletin 6 -- March 13, 2003

The Health Subcommittee of the House Committee on Energy and Commerce held a hearing on March 12, 2002 regarding states' perspective on the Medicaid system. Medicaid has become the largest health insurance program in the nation, consuming more than 20 percent of state budgets and stimulating spending increases of more than 13 percent annually. The program currently serves 47 million patients, including 23 million children, 5 million seniors, and 8 million adults with disabilities.

Commencing the hearing, Ranking Member Sherrod Brown (OH) commented that 41 million Americans remain uninsured today, and that Medicaid, Medicare and SCHIP are important programs that cover individuals disenfranchised in the health care system, people that either live in poverty or are medically uninsurable. Those testifying included Florida Gov. Jeb Bush, Connecticut Gov. John G. Rowland, and New Mexico Gov. Bill Richardson.

Gov. Bush touted Florida's implementation of the program as an example that could be used in other states, and one that can serve as a springboard for future reform.. Gov. Bush outlined some of the challenges facing the Medicaid system in his state, among them population changes, lack of focus on ailment prevention, receding availability of health care providers in the system, and stifling bureaucratic inefficiencies. In addition, Gov. Bush called for a fundamental rewrite of the nation's Medicaid law, and stated that "our goal should be to create a program that is grounded in patient access, preserves the dignity of the patient, and is predictable in terms of cost." The main elements of the reform suggested by Gov. Bush include 1) more flexibility for the states to tailor the program to fit its unique needs; 2) allowing more focus on the patients while encouraging beneficiaries to be more active participants in identifying their needs, in choosing the right plan, and in sharing the cost; 3) incorporating an SCHIP like model where commercial coverage is used as a benefits standard; 4) simplified administration of the Medicaid program; and 5) curtailing the spiraling costs of the program, thus making it more affordable for the states.

Gov. Bill Richardson, agreeing with the proposal outlined by Gov. Bush, added that the changes are necessary in order to ensure that the program will continue to serve as a critical safety net. He also reminded the subcommittee members that the program plays a critical role in the economic health of local communities, generating $3.4 million in business activity for every $1 million spent. The Governor also warned that Medicaid costs are rising despite efforts on the part of the state to contain them, and requested the preservation of the federal-state partnership as part of the Medicaid reform. Similarly, Gov. Rowland recommended that reform is needed if states want to retain and sustain a health care safety net for working families during the hard economic times that the states now confront. Gov. Rowland spoke of his support for the President's proposal to revamp the Medicaid system, and asserted that it would allow states greater flexibility to tailor the program to their individual needs.

For more information about this hearing, please visit: http://energycommerce.house.gov .

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