PORTLAND, Ore. (AP) – Sen. Gordon Smith called for the Bush administration to delay plans to reduce Medicaid spending by $45 billion over the next decade until the government better understands how to deliver health care to the poor.
"I think they would be devastating," the Oregon Republican said of the proposed cuts.
Smith introduced a bill Wednesday to create a national Medicaid commission to study the system for a year.
Medicaid is the federal-state health insurance plan for low-income people. The federal government, which pays about 60 percent of the cost, sets minimum Medicaid standards. But states have some flexibility in how they design their Medicaid plans.
Spending for Medicaid has surged nationally and is estimated to reach more than $300 billion this year. Critics say it is an inefficient system.
More than a decade ago, Oregon became a national leader in restructuring its Medicaid plan to serve more people by limiting care to the most cost-effective treatments. But that model, known as the Oregon Health Plan, is struggling because of increased need and tight state budgets.
The Bush administration’s plan to reduce funding, which could amount to nearly a half-billion dollars in Oregon over the next decade, could worsen the state’s problem.
The Oregon Health Plan includes two main parts. OHP Plus covers about 338,000 low-income adults and children who qualify under federal Medicaid law. OHP Standard offers a leaner set of benefits for adults added to the Health Plan since 1994, when Oregon drew national attention for its effort to expand coverage for the working poor.
It covers adults who don’t qualify for OHP Plus but are officially poor, with incomes below $9,310 a year for a single person or $18,850 for a family of four.
But in the face of state budget woes, the number of Oregonians covered by OHP Standard has fallen from about 92,000 to about 35,000 during the past two years.
Though Bush’s budget proposal would reduce federal Medicaid spending by about $45 billion over a decade, Chad Kolton, a spokesman for Bush’s budget office, said Medicaid spending still would grow, but at a smaller rate.
"What we’re talking about here with the reforms that we are proposing is not to cut Medicaid but rather let Medicaid grow by 7.2 percent each year rather than the 7.4 percent that is under the current system," Kolton said. "This is a very reasonable proposal and, in fact, will help make the program more sustainable."
Oregon’s senators could play an important role in Bush’s Medicaid proposal. Oregon is the only state with both senators on the Finance Committee, which oversees Medicaid.
Sen. Ron Wyden, D-Ore., strongly criticized Bush’s proposal after the budget was released Monday.
Smith said Wednesday the federal government has called on commissions to study other policy areas, such as Social Security and Medicare. Smith wants a 23-member commission to thoroughly study Medicaid before Congress makes any large changes.
"To do the budget and then impose the policy is putting the cart before the horse," Smith said.