Federal Medicaid Spending Has Doubled in 10 Years, May Double Again Without Reform, Leavitt Warns

Barton, HHS Secretary Seek Bipartisanship on Medicare

WASHINGTON - State expenditures for Medicaid programs have begun to outpace spending on schools, and the federal share is doubling every decade, Health and Human Services Secretary Michael Leavitt told members of the House Energy and Commerce Committee today.

"This past year, for the first time ever, states spent more on Medicaid than they spent on education," he said, adding that "over the next 10 years, American taxpayers will spend nearly $5 trillion on Medicaid in combined state and federal spending."

The secretary said that the federal share of Medicaid spending doubled in the last decade and predicted it could double again in the next. "The growth in Medicaid spending is unsustainable," said Leavitt.

"You have a formidable year in front of you," observed U.S. Rep. Joe Barton, chairman of the committee. He said that states need flexibility in deciding how to spend Medicaid dollars, but "we also need greater accountability. ...The laws governing Medicaid eligibility should not create incentives for individuals to manipulate the system and transfer assets to qualify for long-term care."

Health Subcommittee Chairman Nathan Deal, R-Ga., expressed support for giving state governments more flexibility in operating their Medicaid programs. "It will make the money go further," he said.

And U.S. Rep. Michael Burgess, R-Texas, a physician who recently joined the committee, noted the problem of using a complex web of intergovernmental transfers to finance some states' Medicaid programs. "It's my belief that if some states are abusing this feature of the Medicaid program, then we should clamp down on those states in fairness to other states that don't. If a state such as California is abusing IGTs, isn't that a detriment to my home state, Texas?"

Barton promised further hearings into the Medicaid funding issue because, he said, "it is critical that we ensure that every Medicaid dollar is used to improve the health care of the people who depend on the program."

Today's hearing marked the first appearance of the newly appointed Secretary Leavitt before the committee.

The chairman also used the occasion to seek greater cooperation within Congress as the Medicare Modernization Act prescription drug benefit, which passed last year with strong support from HHS, heads toward full implementation in January.

"Quite frankly," he noted, "the tactics used by opponents of the Medicare bill disappointed me. Scaring seniors into not enrolling in a Medicare prescription drug card program that would have saved them money was inexcusable."

Looking ahead, Barton told the new HHS Secretary, "I want to work with you to make sure that transition happens smoothly and efficiently."

For his part, Leavitt focused on more recent criticism of the Medicare Modernization Act. "Recent press reports have inaccurately claimed that our costs estimates have dramatically increased," he said. "This is simply untrue."

Both he and Barton called for bipartisan cooperation as the prescription drug benefit becomes available next year.

"I know not everyone in this committee supported the passage of the Medicare bill, but it is now law, and in 10 and a half months, almost 43 million Americans will be eligible to receive much-needed assistance with the high cost of prescription drugs," Leavitt said. "Let us put aside our difference and work together..."

Barton, R-Texas, noted that "we could not have passed into law the Medicare Modernization Act without the input and support from Democrats. I want to be able to work with our Democratic members to continue to improve our health system."

Finally, the chairman and the secretary agreed on the need for a normal reauthorization process for the National Institutes of Health, which Barton noted has had its funding doubled in recent years, but has not subjected its programs to the scrutiny of a formal authorization in some years.

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