Governors propose Medicaid reform strategies.(Practice Trends)

The Bush administration has focused on overhauling the Social Security program, but the nation's governors and health providers say the real crisis is in Medicaid.

The National Governors Association (NGA) has offered a reform proposal to Congress, which has begun considering what can be done to sustain the program that provides health care for some 53 million impoverished and disabled Americans.

In July, the administration named 13 voting members and 15 nonvoting members to its commission on Medicaid reform. By law, the commission has until Sept. 1 to outline recommendations for cutting $10 billion from the Medicaid program; a report on long-term solutions for the program is due at year's end.

Tennessee Gov. Don Sundquist (R) will chair the commission and former Maine Gov. Angus King (I) will serve as vice chair, the Health and Human Services department announced.

Both state and the federal governments are feeling the squeeze. The program will likely hit $350 billion overall in 2005.

Medicaid represents 22% of the average state budget, according to testimony given to Congress by Mark Warner, Democratic governor of Virginia and chairman of the NGA. The problem: a skyrocketing caseload over the last 5 years, combined with rising health care costs, and an increasing number of sicker patients, Gov. Warner said.

The number of enrollees has grown by 40% in that period--at a time when eligibility has often been restricted, except for pregnant women and children, who have made up some of the growth. But there has also been a huge increase in the number of seriously disabled and severely and chronically ill recipients. Though they make up only 25% of the total number of Medicaid recipients, the elderly and disabled account for more than 70% of the budget.