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Commission to chop $10 billion from Medicaid over five years

Note that Oregon Senator Gordon Smith voted FOR the "fiscal year 2006 budget resolution" which contained the Medicaid cuts.
May 24, 2005

HHS Secretary Mike Leavitt on Friday formally established the Medicaid study commission, the ... New York Times reports. The commission, called for in the fiscal year 2006 budget resolution approved by Congress last month, will recommend ways to cut $10 billion from Medicaid over five years and propose longer-term solutions to slow the program's rising costs. Leavitt will appoint the commission's 15 voting members.

The voting members will include Leavitt or his designee; federal Medicaid officials; current or former governors; current or former state Medicaid directors; three health care policy experts from public policy organizations; and other "individuals with expertise in health, finance or administration," according to the commission charter (Kaiser Daily Health Policy Report, 5/12). In addition, eight members of Congress and up to 15 health policy experts will act as nonvoting members (New York Times, 5/21).

The commission is expected to make cost-cutting recommendations by Sept. 1. The charter states that by Dec. 31, 2006, the commission must make "longer-term recommendations on the future of the Medicaid program." According to the charter, the commission will address 10 questions, including, "What are alternatives to Medicaid for the delivery of long-term care?" The commission also will address whether "eligibility, benefits and financing structures for three broad categories of beneficiaries -- including mothers and children, individuals with disabilities and the elderly -- [should] be modified" (Kaiser Daily Health Policy Report, 5/12).

Leavitt Comments

Leavitt on Friday said in a statement that Medicaid "is rigidly inflexible and inefficient, and worst of all, it is not financially sustainable." He added, "I look forward to working with this commission in an open and bipartisan manner to reform and modernize Medicaid. The time to reform Medicaid is now, and this commission will help the administration, Congress and the states create a plan to ensure Medicaid can meet its goal of providing quality health care in a financially sustainable way" (HHS release, 5/20).

Congressional Reaction

The Medicaid commission "bears little resemblance to the panel some lawmakers asked Leavitt to create," CQ HealthBeat reports. Some legislators had requested that bipartisan congressional leaders appoint commission members and that the Institute of Medicine administer the panel. Sen. Jeff Bingaman (D-N.M.), who co-sponsored legislation with Sen. Gordon Smith (R-Ore.) to create the Medicaid commission, said in a statement, "I had hoped for a commission that could produce a report that both sides of the aisle could buy into. I have serious doubts about whether that will happen under this scenario." Bingaman added, "We already know the Bush administration supports deep cuts in Medicaid, and it concerns me that the [HHS] secretary will be appointing all of the voting members of the panel."

Smith was unavailable for comment. Rep. John Dingell (D-Mich.) said in a statement, "The commission appears to be a fig leaf for $10 billion in Medicaid cuts rather than an independent and credible source of recommendations for changes in the program." Additional requests from Dingell, Smith, Sen. Max Baucus (D-Mont.) and other lawmakers included requiring a super majority of commission members to agree on recommendations and requiring all meetings to be held in public. The commission meetings "shall be open to the public except when closure is specifically allowed by statute and after all regulatory requirements for doing so have been met," according to a Federal Register notice. There will be public notice for all meetings (CQ HealthBeat, 5/20).

"Reprinted with permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at  http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation . 2005 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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