State officials expect a surge in the number of people seeking Medicaid health benefits in the wake of Hurricane Katrina (search), and they want the federal government to cover all costs.
Those predictions came just as congressional committees were to take up legislation that would slow Medicaid's growth over the next five years by an estimated $10 billion.
States have asked Congress to pick up 100 percent of the costs for any Medicaid (search) recipients added to their rolls as a result of Katrina.
Currently, the program is a state-federal partnership. Washington, on average, covers about two-thirds of the costs. For most Southern states, the government picks up even a larger share because of the high poverty rates.
Carol Herrmann, who oversees Medicaid in Alabama, said states lack the means to pay for the demand that will result from Katrina.
"I certainly understand everyone's desire to reform Medicaid, and there needs to be significant reform," she said. "But now might not be the most opportune time to take that issue on."
Her counterpart in Mississippi, Bobby Moody, said, "I know the people of Congress will not try to balance the budget on the backs of folks who have gone through a natural disaster the likes of we've never seen before in this part of the country."
The Senate Finance Committee has been instructed to find $10 billion in savings in entitlement programs, including Medicaid. The House Energy and Commerce Committee was told in the budget blueprint to come up with $14.7 billion. It is anticipated that most of the savings would come from Medicaid.
The committees were instructed to approve by Sept. 16 legislation that slows the program's growth.
The chairman of the Senate committee, Sen. Charles Grassley, said there is broad agreement that some changes are required to sustain Medicaid.
For example, state governments could save as much as $5 billion over five years while serving the same number of people if they paid drug companies less for the drugs they purchase, said Grassley, R-Iowa.
Grassley said he would propose that any state affected by Katrina could opt out of the changes if they believe the legislation would not help.
"I think that the states will conclude that the committee proposals will help them better serve their beneficiaries, but in the event a state doesn't, this kind of flexibility may be helpful to states such as Alabama, Louisiana and Mississippi right now," Grassley said.
Four committee members have asked Grassley to delay addressing cuts in entitlement programs. The lawmakers are GOP Sens. Gordon Smith of Oregon and Olympia Snowe of Maine, and Democrats Blanche Lincoln of Arkansas and Jeff Bingaman of New Mexico.
"As Congress moves forward with its fall agenda, we must remain focused on the relief efforts and ways to deliver both short and long term aid," the senators said. "We believe this is best accomplished by not cutting entitlement programs at this time."
A spokesman for the Health and Human Services Department declined to respond to questions about whether Congress should continue with efforts to reduce the size of the Medicaid program.
The administration has emphasized the proposed reductions represent less than 1 percent of the federal government's share of the Medicaid budget of $1.1 trillion over the next five years.
"That's for another day," said spokeswoman Christina Pearson. "Right now we have to put our focus on the people affected by Hurricane Katrina."
Democrats were not so reticent.
"For hundreds of thousands of families, Medicaid is going to be a lifeline in the coming months," said Rep. John Dingell, D-Mich.
Dingell, the top Democrat on the House Energy and Commerce Committee, asked the GOP to scrap the budget blueprint that Congress passed in the spring.
"Clearly, the number of dollars required in Medicaid, very stretched already, will increase," said Rep. Sherrod Brown, D-Ohio. "It would be amazingly callous, and to me, unconscionable if they insist on these Medicaid cuts."
Dingell, Brown and Rep. Henry Waxman, D-Calif., urged the administration to agree to the states' request for 100 percent funding.
"Their economies, already poor and struggling to recover from the recession, will be unable to support the regular matching payments needed to provide health care to the tens of thousands who will need it over the coming months," the lawmakers wrote HHS Secretary Michael Leavitt (search) on Wednesday.