Virginia Governor Details Medicaid Concerns

SCOTT SIMON, host:

Anyone who's ever filled out the paperwork necessary to receive Medicaid benefits knows that Medicaid is a complicated, exasperating and often costly program. Anyone who's ever tried to balance a federal or state budget knows the same thing, that Medicaid is a complicated, exasperating and often costly program. The future of Medicaid is a matter of simple math at the moment. Congress plans to cut 10 billion federal dollars from the program over the next five years and states do not have the money to make up the difference. At the same time, the number of Americans who need government assistance to afford health care is growing. This week, the National Governors' Association outlined reforms they say would help states better handle Medicaid costs. Virginia Governor Mark Warner is the chairman of that association and joins us from his office in Alexandria, Virginia.

Governor, thanks for being with us.

Governor MARK WARNER (Virginia): Scott, it's my pleasure.

SIMON: Give us some idea of what you've confronted in Virginia, for example, how much you expect to be disappearing, how much more you have to pay.

Gov. WARNER: Well, in Virginia, we've seen total Medicaid spending over the last 15 years go from $1 billion a year to $5 billion a year. What we've got going right now are three simultaneous cost shifts where the federal government is trying to push these costs on the states. At the same time, employers are more and more, increasingly, not providing health insurance to their employees and then encouraging folks to go on the Medicaid roles. And if we're going to be honest, we're--certain middle-class Americans are finding ways to really kind of disinvest Mom and Dad's assets as they get a little bit older so that if they go into a nursing home, they, again, can fall on Medicaid roles as well. All three of those hits at once have driven Medicaid costs on average in states to the point where they are now passing basic K-12 education costs. So in a very real way, we're pitting the needs of Grandma against the needs of the grandkids.

SIMON: Governor, do you think it is necessary to, in a sense, redefine some of the eligibility of requirements so that fewer people would receive Medicaid?

Gov. WARNER: Well, one of the problems we've got in this country is we've got 58 million Americans on Medicaid and another 45 million without health insurance who could become eligible for Medicaid if they become poor. This problem of the uninsured--these are the people who are really getting the real short end of the stick in our health-care system in America today. And we ought to find a way that, as we reform Medicaid, we also look at the needs of the uninsured.

SIMON: Governor Warner, I gather you say that more than 60 percent of all senior citizens in nursing homes need Medicaid to keep them there. But that includes some people who perhaps could afford to pay for their long-term care.

Gov. WARNER: You're right, Scott. The technical term is asset transfers, where you find a way through a trust or another vehicle to kind of move all the assets out of Mom and Dad or Grandma and Grandpa's holdings so that they, in effect, become poor so they qualify for Medicaid aid. So we're trying to strike a balance. What we have suggested is, yes, let's tighten up the rules on asset transfers, but at the same time, put in place a federal tax credit to encourage people to buy long-term care insurance. Let's look at something that some states have tried, but not in a major way, reverse mortgages. So someone could actually stay in their home, maybe not have to go to a nursing home, get quality in-home health care and be able to actually retain some equity in their house that they could go ahead and pass onto their heirs. Again, this will at least help us with the biggest driving costs of Medicaid at this point, which is long-term care.

SIMON: I noticed this is a bipartisan plan. Do you find that something like Medicaid reform is one of those issues where the dividing line, at least for the governors, is not necessarily Republican and Democrat so much as if you're a governor you understand this issue in a certain way?

Gov. WARNER: Scott, absolutely. What was remarkable sitting up there in Congress, which, again, I'm struck by how deep the partisan divisions are and how there seems to be a sense of unwillingness to a degree on both sides to really look at solutions. And Lord knows, what we need, not only on Medicaid but on health care overall in this country, is some folks laying out solutions.

SIMON: Is Medicaid one of those issues that could make a guy want to run for president?

Gov. WARNER: Medicaid's one of those issues that could make you scratch your head and say, `How did you get into politics in the first place?' But it is one of those issues that, while it's not real high profile I think amongst a lot of Americans--as a matter of fact, I think the president shows the wrong crisis to focus on. Long before Social Security goes bankrupt, Medicaid is going to bankrupt all the states, and this is an issue that really plays a critical role in 58 million Americans' daily lives. We've got to find a way to solve it. Although I've got to add that we can't fix Medicaid in its entirety unless we also look at fixing the overall health-care system. A lot of the Medicaid's problems are the same thing in the private health insurance, that are the same thing that Americans of every income strata have to face.

SIMON: Governor Warner, thanks very much.

Gov. WARNER: Thanks a lot, Scott. Take care.

SIMON: The governor of Virginia, Mark Warner.

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