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House Committee Approves Medicaid Overhaul

September 22, 1995

WASHINGTON (AP) _ Republicans rushed their radical transformation of Medicaid over its first committee hurdle Friday after rejecting Democratic attempts to preserve federal health care guarantees for the poor and the elderly.

The House Commerce Committee approved the overhaul, 27-18, just three days after Speaker Newt Gingrich unveiled the plan that would turn Medicaid over to the states in block grants, cut its growth in half and save an estimated $182 billion over seven years.

``We are on the verge of transforming the fastest-growing entitlement program in America,″ boasted Rep. Thomas J. Bliley, Jr., the chairman. ``MediGrants will allow the states more money for health care, and fewer bureaucrats, fewer rules, to tell them how to spend it.″

But Rep. Henry A. Waxman, D-Calif., architect of a major expansion of Medicaid over the past decade, called it ``a sad day for this committee.″

``There are no guarantees of anything. For the 36 million people now covered under Medicaid, they may not be covered any longer,″ said Waxman. Without federal guarantees, he warned, the number of Americans without health insurance could skyrocket to 80 million.

Medicaid is a $155 billion joint federal-state health plan for the needy that was created in 1965 alongside Medicare. The Medicaid system:

_Pays to deliver one in three babies and picks up half the nation’s nursing home bills.

_Serves as the health safety net not only for the poor, but the severely disabled, for many AIDS sufferers and for seniors who lose their life savings to illness.

_Is the fastest growing component of many states’ budgets, a headache for Republican and Democratic governors alike, and notorious for its complexity and inefficiency.

_Grew almost 20 percent a year in the early 1990s, partly because of gimmicks states used to maximize their federal matching funds but also because Congress dictated wider coverage of children and pregnant women.

The Republican plan would throw out virtually all the federal rules while requiring states to spend 40 percent of their ``MediGrants″ on low income families, the disabled and elderly. They could spend the rest as they saw fit on their state’s health needs.

GOP lawmakers, seldom breaking ranks, mowed down a series of Democratic amendments that attempted to assure funding for children’s hospitals, let ex-welfare mothers keep coverage for 1 year after getting a job, and let providers or managed care plans sue states over inadequate payments.

On Thursday, the committee rejected Waxman’s attempt to preserve federal standards for nursing homes. It also refused to keep current rules that let spouses keep their homes and a portion of their income when an ailing husband or wife goes on Medicaid in a nursing home.

However, the committee added a requirement that states develop their own rules to protect such spouses from impoverishment.

The GOP Medicaid plan now goes to the House Budget Committee to be rolled into a massive budget reconciliation bill.

Under the plan, federal Medicaid spending would slow from 10 percent to roughly 4 percent a year. All states would get a 7.2 percent increase for 1996, but beyond that, the grants would increase as little as 2 percent a year in some states while growing at 9 percent in others in 1997. States would get increases of 2 percent to 6 percent in 1998 and beyond.

Friday’s debate was largely devoid of emotion until Rep. Tom Coburn, R-Okla., promoted an amendment that would bar Medicaid payments for abortion for victims of statutory rape.

The GOP bill would extend an existing ban on using federal money for Medicaid abortions except to save the mother’s life or in cases of rape or incest.

Rep. Peter Deutsch, D-Fla., called it ``hypocrisy″ that the Republicans want to give states free rein on how to spend their health grants, except when it comes to abortion.

``The unborn need protection,″ responded Rep. Cliff Stearns, R-Fla.

``I think nursing home patients need protection,″ shot back Deutsch.

Coburn, a doctor, withdrew his amendment.

The sole Democratic vote for the bill was cast by conservative Rep. Ralph M. Hall of Texas.

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