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Governors Demand Medicaid Relief

The National Governors Association (NGA) is asking for a $5.5 billion relief package to prevent cutbacks in Medicaid, the troubled program that provides health care to the poor.

An October survey by the Kaiser Commission on Medicaid and the Uninsured found that in most of the 20 surveyed states Medicaid officials had been directed by the governor to reduce spending below the level authorized by the legislature (Psychiatric News, December 7, 2001). As of 1997, the most recent year for which data are available, Medicaid funds accounted for 20.3 percent of the total dollars spent on mental health and substance abuse.

According to the National Association of State Budget Officers, states face a current shortfall of $15 billion. Shortfall estimates for New York and California are $3 billion each. NGA officials point out that nearly all states are required to balance their budgets under state laws or constitutions.

NGA Chair and Governor of Michigan John Engler (R) said in a press release, "The revenue picture in states was bleak before September 11 with skyrocketing Medicaid costs and the economic downturn forcing governors around the country to cut their budgets. Now governors are looking at unanticipated costs associated with homeland security. States need help, and increasing the federal share for Medicaid would be a way to put desperately needed funds where governors need them most—providing health care to poor families."

In December delegations of state executives visited the White House and Capitol Hill to urge passage of the one-year Medicaid relief package. According to the December 18, 2001, Washington Post, Engler and other Republican governors met with Bush chief of staff Karl Rove to present their argument that if states have to cut spending by "$40 billion or so" next year, it would be a drag on the economy.

While the Bush administration fears that the proposal would set a precedent for higher federal payments, a spokesperson for the Office of Management and Budget said, "We’re looking at all the options."

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