by Joe Sullivan
Shortly before his inauguration, Phil Bredesen said one of his first steps as governor would be to seek out Sen. Bill Frist and the rest of Tennessee's Congressional delegation. His singular mission: to enlist their support in dealing with the biggest single contributor to the state's resurgent fiscal bind: the escalating cost of TennCare.
The fact that Bredesen would turn to Washington for help on TennCare dramatizes that it's not a problem peculiar to Tennessee. It is symptomatic of a fiscal crisis that is facing nearly every state and thus cries out for a national solution. Rising costs of Medicaid (on which TennCare is based) coupled with declining revenues that reflect a weakened economy have left many states with gaping deficits that actually make Tennessee's budget problem pale by comparison.
According to a recent survey conducted for the Kaiser Commission on Medicaid and the uninsured, "States continue to confront the most daunting fiscal situations they have faced in decades. In real terms, state revenues have been falling for five straight quarters. State spending is increasing, and spending on Medicaid, a joint federal-state program that covers more then 42 million low-income individuals, is increasing rapidly." Indeed, the survey finds that despite cost-containment efforts, Medicaid spending is expected to grow nine percent nationally in the current fiscal year, atop 13 percent growth in the preceding year. For all of TennCare's much-publicized difficulties, these national growth rates approximate those incurred in Tennessee.
Frist is in a unique position to help alleviate these difficulties as a subset of a solution to those facing the nation as a whole. As the Senate's newly selected majority leader, he's got more say-so than anyone else in shaping the Senate's agenda and the Bush administration's posture toward it. Moreover, even prior to his selection, he had already emerged as one of the Senate's foremost framers of health-care legislation. Hence, his role in this field will be all the more influential.
There are two measures pending in the Senate that could contribute significantly to relieving Medicaid-driven deficits at the state level. One is a bill to supplement, for a period of 18 months, the federal share of Medicaid expenditures that are presently borne approximately two-thirds by Washington and one-third by the states. The other would extend the scope of Medicare to cover prescription-drug costs that—in the case of indigent seniors eligible for Medicaid—are now borne in part by the states. Each of these measures, and Frist's pivotal role in determining their fate, merits a closer look.
State Fiscal Relief. A bill with bipartisan sponsorship would channel $20 billion to state governments to help cover state deficits over the next 18 months—long enough, it's hoped, for an economic recovery to start bolstering state revenues. Half of the money would be earmarked for supplemental Medicaid payments and the balance for other social services. Tennessee would figure to get about $300 million of this money.
A similar bill passed the Senate on a 75-25 vote last July. But it never saw the light of day in the House in no small part because the Bush administration was (and remains) opposed to it as a "budget buster." Frist, apparently adhering to the administration line, was among the 25 senators opposed. But just this past week he announced that he now favors some form of additional federal funding of Medicaid.
Just how an administration that's proposing $674 billion in new federal tax cuts could oppose a break for financially strapped states is beyond this columnist's comprehension. The National Governors Association is trying to bring its former compatriot from Texas to his senses, and Frist will hopefully contribute to this effort.
Medicare Drug Benefits. Among the many approaches before Congress for extending Medicare to cover outpatient prescription drugs, the one that has the most standing in the Senate was co-authored by Frist and Democrat Sen. John Breaux of Louisiana. The Frist-Breaux plan encompasses much more than just drug benefits in its emphasis on offering Medicare beneficiaries greater choice in the selection of health plans. But whatever plan they may select, beneficiaries with incomes below 135 percent of the poverty line would have their drug costs covered in full by Medicare. In the case of Tennessee, this coverage would reach the 230,000 indigent seniors who now get their prescription drugs paid for by TennCare at a cost of $372 million in fiscal year 2002. Since the state now pays a third of this cost, the Frist-Breaux plan would save Tennessee $124 million.
Frist spokesman Nick Smith says that as majority leader the senator is not wedded to any particular plan but "is looking to work with folks on the Senate finance committee to put together a broad bipartisan Medicare prescription drug benefit." No one in Congress is better qualified to do so than Frist.
Another way Frist may be able to help relieve TennCare's financial bind is by encouraging the program's federal overseers to relax constraints on federal matching funds that were imposed last year. Because of miscalculations on the part of state officials, these constraints may force the state to absorb the entire cost of a projected $258 million in TennCare expenses in excess of a federal cap.
In the long run, it's up to Bredesen and his administration to bring order out of chaos in the management of this $6 billion program that consumes more than 20 percent of the state's budget. Given the runaway Medicaid expenses that are afflicting nearly every state at this time, however, Bredesen is right to look to Washington for relief. And Tennessee is fortunate to have a person of Frist's stature to look to.
January 23, 2003 * Vol. 13, No. 4
© 2003 Metro Pulse
| 
