Senators, administration argue over Medicaid waivers

Like cranky pen pals, Health and Human Services (HHS) Secretary Mike Leavitt has been exchanging letters in recent days with Senate Finance Committee Chairman Chuck Grassley (R-Iowa) and ranking member Max Baucus (D-Mont.) as they bicker over the administration’s approach to providing medical care to victims of the Gulf Coast hurricanes.

In the meantime, Leavitt’s agency continues to push ahead with its efforts to draft agreements with the states to ease the enrollment of evacuees into Medicaid — it already has approved waivers of Medicaid rules for five states. The administration emphasizes that the speed of its response directly speaks to the wisdom of using the existing waiver process on a state-by-state basis.

“This is the best approach,” said HHS spokeswoman Christina Pearson.

Medicaid is jointly funded by the federal government and the states but administered by state programs. States can apply to HHS for waivers that allow them to change their eligibility requirements and benefits packages. These waivers have been a cornerstone of the administration’s management of Medicaid and have been very popular with governors.

“We’ve worked very closely and very collaboratively with states to come up with a response that … can best meet their needs immediately,” Pearson said. “Our efforts are concentrated on what we can do immediately.”

She added that HHS has been turning around the hurricane-related waiver applications in a fraction of the time it usually takes for a waiver to clear. Waivers have been approved for Texas, Alabama, Mississippi, Florida and Idaho as of yesterday, she said.

The administration “has proven that it can issue a waiver faster than Congress can act,” said Joseph Antos, a healthcare scholar at the conservative American Enterprise Institute.

As usual, however, the central issue is not the way the administration is acting but the question of who, ultimately, will pay for the extra spending that will be required to provide Medicaid benefits to many people who otherwise would not have qualified for the program.

Grassley and Baucus introduced legislation weeks ago that proposes, among other things, that the federal government cover 100 percent of those extra Medicaid expenses. The administration, along with key congressional leaders, has resisted the bill, and objections from at least one senator have blocked its progress to the floor.

But apart from Grassley and most Democrats, there appears to be little interest in even a temporary expansion of Medicaid, especially at a time when wholesale reform of the program remains on the table.

The Congressional Budget Office estimated that the bill would cost $8.9 billion.

Making sure that hurricane victims have access to medical care and figuring out how to pay for it are two separate issues, Antos said. Unless Congress acts one way or another, the home states of those evacuees would be responsible for the costs of the medical care their residents receive through Medicaid in other states, but Antos questioned whether providing federal money through Medicaid is the most prudent approach given the large sums of money already filtering to the states.

Financial relief for hurricane-stricken states “is not inherently a health problem,” Antos said.

But without the Grassley-Baucus bill, whether and how states will get help for Medicaid costs related to the hurricane is an open question, which makes some people nervous.

“I don’t know where the dollars are coming from,” said Diane Rowland, executive director of the nonpartisan Kaiser Commission on Medicaid and the Uninsured. Rowland also said Medicaid’s rules might prohibit states from transferring disaster-relief money to cover healthcare costs.

Grassley and Baucus highlighted those points in a letter sent to Leavitt on Tuesday night. “The Department [of HHS] does not have the statutory authority to waive” states’ share of the Medicaid costs, they noted.

National Governors Association (NGA) Health and Human Service Committee Director Matt Salo said that, although the governors are confident that they will not be left to foot the entire bill for the additional Medicaid costs, they would like to see a concrete plan. The NGA has backed the Grassley-Baucus bill and is open to talking with all sides to reach a consensus on the right approach.

Speaking to reporters Tuesday, Senate Minority Leader Harry Reid (D-Nev.) assailed those who blocked the measure because of its price tag. “Where does that money go? It goes to the poorest of the poor,” he said.