GOVERNORS' praise Bush proposal on Medicaid flexibility, money questions remain

Saturday, August 4th 2001, 12:00 am

By: News On 6

PROVIDENCE, R.I. (AP) _ The Bush administration is acting to give states more flexibility with federal health insurance programs so they can expand coverage for the uninsured, a move that drew bipartisan praise Saturday from the nation's governors.

The plan will not affect health coverage of the poorest Medicaid recipients, but could scale back coverage for millions with somewhat higher incomes.

Questions remain about how much federal money will be available for the programs, several governors from both parties said during the summer meeting of the National Governors Association.

``There is more flexibility, which is good,'' said Democratic Gov. Howard Dean of Vermont. ``This is very close to what the NGA asked for.''

Dean, long involved in the governors' efforts to loosen restrictions on using federal money in programs such as Medicaid, said ``there are unanswered questions about how well this will work'' because of the uncertainty about the dollars available.

President Bush used his weekly radio address to promote the initiative. ``The goals of Medicaid are too important to get bogged down in a bureaucracy,'' he said. ``My administration cares about results, about getting Americans broader and better medical coverage.''

The incoming chairman of the association, GOP Gov. John Engler of Michigan, said the policy offers states the flexibility to increase the number of people with insurance.

The plan gives states new power to shape the package of benefits offered to some 12 million people whose states have added to their Medicaid programs. It would not affect the poorest Americans, who are automatically eligible for Medicaid coverage and whose benefits would remain unchanged.

Benefits provided to those with higher incomes might be treated more like private insurance _ with deductible levels and co-payments, Dean said.

The plan encourages states to cover parents through the Children's Health Insurance Program, or CHIP, which targets families who earn too much to qualify for Medicaid but not enough to afford health insurance on their own.

In exchange for the flexibility, states will be required to set goals for reducing their number of uninsured residents and then document their progress.

``We're asking states to give us an action plan on how they will reduce the uninsured,'' Health and Human Services Secretary Tommy Thompson said. He noted that the ranks of the uninsured have already dropped by 800,000 this year because of waivers obtained by states. An additional 2.5 million have gotten expanded insurance.

Democratic Gov. Parris Glendening of Maryland, chairman of the governors' group, said some states will be hard pressed to expand coverage if federal funds are limited.

``We have some states with budgets that are hard pressed,'' Glendening said. Thompson countered later: ``There isn't a governor alive that wouldn't want more money.''

Governors long have contended that Medicaid rules are too expensive and too inflexible. They say they could cover people if they had the power to offer some state residents a more modest health insurance plan.

Under the Bush plan, people who are automatically eligible for Medicaid would continue to receive the full benefit package. But states could give other groups the less-generous package offered through the Children's Health Insurance Program.

They also could offer people not covered under Medicaid at all _ such as adults without children _ any plan that is offered to state workers.

States would have to apply to HHS for a special waiver to change their Medicaid programs, officials said. But the department plans to make it easy by making standard applications available electronically and taking just days or weeks to review them.

Arkansas Gov. Mike Huckabee, a Republican, said he wants to hear more details about the plan, but is wary of any program that would reduce benefits for some current recipients. He was confident Thompson, a former GOP governor of Wisconsin, would protect the states' interests.

``We consider him a champion for us in that role,'' Huckabee said.