Bush Proposes Medicaid Overhaul

Washington

One day after the U.S. General Accounting Office added Medicaid to its 2003 list of “high-risk” programs, the Health and Human Services Department Jan. 31 unveiled a plan for sweeping Medicaid reform.

As many state governments are facing the worst budget shortfalls since World War II, the Bush administration is proposing a cash infusion for states that choose a new, more-flexible Medicaid option. Instead of matching state Medicaid expenditures, this option would provide for two annual federal allotments: one for acute-care health insurance and one for long-term care and community services. It also would give state officials the flexibility to adjust and/or cut benefits to “non-mandatory” Medicaid populations, such as elderly Americans receiving institutional care.

In exchange for choosing this flexible option, states would receive approximately $3.25 billion in extra federal funding during fiscal year 2004, and an additional $12.7 billion in extra funding during the next seven years.

“We need to bring the same clear-eyed spirit of innovation to Medicaid that we brought to welfare,” said HHS Secretary Tommy Thompson, touting a program that will encourage people with disabilities to make the transition from institutional to home care.

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