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Senators Urge Commission to Study Medicaid

February 9, 2005—Giving experts a year to study the federal Medicaid program and recommend ways to improve it would give lawmakers the political cover needed to approve a major overhaul to the joint federal-state health program for the poor, two senators said Wednesday.

Senators Gordon H. Smith, R-Ore., and Jeff Bingaman, D-N.M., said Congress should have a commission analyze what works in the program and what does not before making any spending cuts or structural changes to Medicaid.

Administration officials and the chairmen of the House and Senate budget committees have targeted Medicaid for spending reductions as a way to help reduce the budget deficit.

But allowing a commission to review all the options first would "provide the political cover and the legislative leverage" for lawmakers who are eager to change the program, Smith said.

Legislation that Smith and Bingaman are co-sponsoring would establish a 23-member commission with members appointed by the president, Congress, governors and state and local officials. The panel would hold public hearings and issue a report with recommendations on how to improve Medicaid, which is estimated to cost the government more than $300 billion in 2005.

More than 50 million people receive care through Medicaid, including low-income seniors, people with disabilities, children and pregnant women.

While Medicaid costs are increasing, they are rising at a slower per capita rate than either Medicare or private sector health care costs, according to documents that Smith and Bingaman distributed at a news conference to announce their legislation.

The key driver behind rising Medicaid costs is higher enrollment, they said. "When nearly 5 million people lost employer coverage between 2000 and 2003, Medicaid added nearly 6 million to its program. Costs rose in Medicaid precisely because the program is working—and working well—as our nation's safety net program," Bingaman said.

Twelve senators, including Senate Republican Conference Chairman Rick Santorum of Pennsylvania, are co-sponsoring the bill, and Rep. Heather A. Wilson, R-N.M., will introduce companion legislation in the House.

While overhauling Medicaid is important, "it's better to do it right than to do it fast," Smith said.

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