Governor backs Medicaid reform
Published: October 19. 2009 4:00AM PST
WASHINGTON — It took painful cuts, new taxes and a one-time care package of federal money to fill what would have been a big hole in Or-egon’s 2009-11 budget.
But while other governors have decried the potential costs to state budgets from health care reform bills that could add thousands of people to state Medicaid rolls, Oregon Gov. Ted Kulongoski has been relatively quiet. In fact, his office said this week, the bigger threat to the state’s finances looms in 2011, when hundreds of millions in federal aid runs out.
Thanks to a provision in a Senate health care reform bill, Oregon wouldn’t face any extra costs from new Medicaid customers added by health care reform in the short term. That measure would pay for all extra Medicaid costs for Oregon and three other states until 2019, or five years after the reform bill kicks in.
That provision, which gives aid to states with high unemployment rates and below-average Medicaid enrollment — meaning they’re likely to see faster growth on Medicaid rolls — is something Kulongoski supports, spokeswoman Jillian Schoene said.
“In terms of expansion, we definitely believe that Congress is appropriately focused on states with higher unemployment rates,” she said.
Patricia Feeny at the Oregon Department of Human Services said they’re still working on detailed estimates of how health care reform will affect the state.
The provision benefiting Oregon was added at the request of Senate Majority Leader Harry Reid, because it benefits his home state of Nevada.
Thanks to the provision, “it looks like Oregon could see an impact from being a high-needs state of up to $21 million over the five-year period of 2014-19,” Feeny said in an e-mail. “That would be a maximum figure estimate and is likely to be higher than the actual savings.”
The state is still working on more comprehensive estimates for the cost of the health reform bills being debated in the U.S. Congress, Feeny said.
Other provisions, like requiring prescription drug companies to rebate a portion of drug costs for Medicaid managed- care plans to state and federal governments, “would save money right away,” Schoene said.
Kulongoski also supports increasing payments to primary care physicians and for community and home-based services, which many analysts, including the nonpartisan Medicare Payment Advisory Committee, say could decrease long-term medical costs by steering people toward less-expensive treatments.
Budget challenges loom for states
Oregon has budgeted $838 million of extra federal funds to solve its budget problems for the end of the 2007-09 budget and the 2009-11 budget, Schoene said.
If the state’s economy hasn’t recovered by then, Oregon’s 2011-13 budget could be as challenging as the one passed this year.
“What happens when the enhanced (payments) under the federal recovery bill ends and before the expansion piece kicks in for these reform bills?” Schoene said. “That’s our bigger concern right now.”
Many states are projected to face deficits in 2011, in part because state revenues tend to lag behind economic recoveries, said Elizabeth McNichol, a senior fellow at the Center on Budget and Policy Priorities in Washington, D.C.
“We’d expect shortfalls in 2011 to be as high as they are in 2010,” McNichol said. “States are going to still be facing significant fiscal problems.”
She projected that states will need to cut or raise a total of $180 billion for their 2011 budgets, in a paper she co-authored last month.
McNichol said “there seems to be the beginning of a conversation” about how to address the continued problems in state budgets.
But after the federal spending spree of the past year, lawmakers haven’t been eager to call for more funding for states. A spokeswoman for U.S. Sen. Jeff Merkley, D-Ore., said it’s too early for that discussion, while a spokeswoman for Rep. Earl Blumenauer, D-Portland, didn’t respond to a question on the subject.
GOP fires salvo at White House
Republicans, meanwhile, con- tinue to hammer the White House for running up deficits in response to the recession. In the GOP’s weekly radio address on Friday, Rep. Kevin Brady, R-Texas, argued that the spending is racking up debt without showing results.
“Under the Obama administration’s budget, our country is set to rack up $6.7 trillion in debt over the next decade — almost equal to all the federal debt accumulated in our nation’s history,” Brady said, although the current national debt is about $12 trillion. “Demo- crats in Washington continue to pursue costly policies that tax too much, spend too much and borrow too much.”
Keith Chu can be reached at 202-662-7456 or at kchu@bendbulletin.com.
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