Senate passes measure that would send billions in Medicaid dollars to states

Friday, July 26th 2002, 12:00 am
By: News On 6

WASHINGTON (AP) _ The nation's governors are lauding a Senate-passed measure that sends states $9 billion in Medicaid help as they deal with shrinking budgets.

The measure ``is an important first step to helping states maintain service levels during the continuing fiscal crisis,'' said Kentucky Gov. Paul Patton, the chairman of the National Governors Association.

Idaho Gov. Dirk Kempthorne, the association's vice chairman, said the Senate action ``ensures that many low-income families will be protected from drastic cuts.''

``As it stands, states can no longer afford Medicaid,'' Kempthorne said. ``It was imperative for the Senate to recognize that states needed significant assistance.''

Governors had pressed hard for the proposal, which passed Thursday on a 75-24 vote.

The measure would give states $6 billion in additional federal matching funds and $3 billion in grants to help them pay for child care and other social service programs.

The Medicaid provision is attached to an overall bill easing access to generic drugs that the Senate is using for its debate on prescription drugs. The House has not passed a similar plan.

The Medicaid measure brought cooperation among Senate Republicans and Democrats, getting far more than the 60 votes needed for passage.

``This is not a bailout,'' said Sen. Jay Rockefeller, D-W.Va., a sponsor of the plan. ``I would say it's very important for the states to be healthy.''

Medicaid was created to provide health care to people on welfare and is financed by a combination of federal and state money. On average, Washington pays 57 percent.

But with health care spending increasing and the economy forcing tight budgets, states have been sounding the alarm about Medicaid, one of the fastest-growing portions of state budgets.

More than 40 states suffered budget shortfalls of $40 billion to $50 billion in the last fiscal year. Medicaid spending increased 13 percent and now constitutes 20 percent of state budgets.

Opponents had argued that the plan amounted to a giveback for states.

``We're broke and we don't act like it,'' said Sen. Phil Gramm, R-Texas. ``A year ago we had a surplus. Today we have a $165 billion deficit, and we're still spending like drunken sailors.''

Meanwhile, lawmakers worked on two different compromises to provide a Medicare prescription drug benefit.

One would offer some drug coverage to all seniors _ albeit significantly scaled back from the $594 billion plan Democrats unsuccessfully brought to the Senate floor this week.

The other plan emerging would offer help only for the low-income elderly or those who already have spent a significant amount of money on prescription drugs.

Some Democrats said there was now momentum for a measure that helps low-income and those with catastrophic costs, which would at least let senators claim some progress. ``It's saying we can't do everything at once,'' Rockefeller said. ``We have to do the best we can.''