Jim Douglas on Health Care Republican VT Governor

Lower Rx drug costs with buying consortium

Extend SCHIP with full funding, plus $12B for Medicaid.

We understand that Congress is moving toward another temporary funding extension for the State Children's Health Insurance Program (SCHIP). The nation's governors recommend the extension include sufficient funds so no state faces a shortfall during the time of the extension. Going forward, full reauthorization of SCHIP remains our top priority and we are hopeful that Congress and the Administration will continue discussions to ensure a sensible, bipartisan SCHIP reauthorization proposal is reached as soon as possible.

In addition, the series of recent Medicaid administrative changes represents a significant cost shift to states of approximately $12 billion in federal Medicaid spending over five years that governors strongly oppose. Sufficient time is needed to evaluate the proposed regulations and we request Congress consider imposing new and extending existing moratoriums on the proposed Medicaid regulations to provide this opportunity.

Delay Medicaid changes that shift costs from feds to states.

The nation's governors urge you to include state countercyclical funding as part of your legislation to stimulate the economy. This would include $6 billion in Medicaid assistance by freezing scheduled federal FMAP reductions and increasing all states' FMAP as well as providing $6 billion in a flexible block grant.

The revenue reductions and Medicaid increases that accompany all economic downturns, in combination with state balanced budget requirements, are forcing states to cut spending as the economy weakens. These actions are procyclical and will make the current downturn both longer and more severe.

States already are experiencing the effects of the slowing economy. During the last two recessions, the state fiscal picture continued to deteriorate for two years after the recessions ended. If the current downturn follows the path of the two previous recessions, 35 to 40 states will face budget cuts in 2009.

In 2003, While we strongly believe that a more thoughtful and collaborative consideration of the issues raised by these regulations is in the best interest of the Medicaid program, there simply is not sufficient time during the remainder of the congressional calendar to fashion appropriate solutions. Your legislation delays implementation of the regulations to ensure Congress has sufficient time to act appropriately on the regulations.

Your leadership on this high priority of the nation's governors is very much appreciated.