Governors Focus on Health, Medicaid Reimbursement

Published April 1, 2006

In February the nation’s governors gathered in Washington, DC to address critical issues including health care and Medicaid reform.

The National Governors Association’s (NGA) four-day conference began with a session on Healthy America, an initiative by NGA Chairman Gov. Mike Huckabee (R-AR). The Arkansas governor’s “Call to Action,” a document distributed to all the governors and released by the NGA that week, urges state leaders to promote wellness among their constituents. The document provided the basis for the Healthy America conference forum.

Obesity, Diabetes Raise Concerns

Comparing the problem of obesity to the risk of a flu pandemic, Huckabee stressed the growing health problems obesity is causing. “Across the nation, the health of Americans is at serious risk due to unhealthy lifestyles, physical inactivity, and poor nutrition,” wrote Huckabee in the introduction to his Healthy America agenda. “We live in a culture where people are not physically active on a regular basis and increasingly spend time sitting in front of a TV or computer screen.”

Speaking at the conference, Huckabee warned his fellow state leaders that the incidence of Type 2 diabetes, caused largely by obesity, is rapidly growing and will shorten the lifespan of today’s young people if steps are not taken in schools, at home, and in the workplace to stem the chronic disease.

U.S. Secretary of Health and Human Services Mike Leavitt agreed with Huckabee that chronic health problems are a threat to national well-being and the economy. “Seventy-five percent of [U.S.] health care spending can be directly attributed to chronic diseases that, in large measure, can be prevented, … can be managed,” said Leavitt. Leavitt also said states should take precautions to plan for a flu epidemic, as President George W. Bush has advised.

Leavitt had spent the weeks preceding the NGA meeting traveling to 18 states to meet with governors about the Medicare prescription drug benefit. At the conference, Leavitt said enrollment in the drug benefit is increasing dramatically, by hundreds of thousands each week. Costs are down, he noted, referring to the approximately $25 in monthly premiums being paid on average by recipients as opposed to the previously estimated $38. And problems are being solved, Leavitt said.

Reimbursement Promised

“We’re going to ensure that you’re reimbursed by the plans for the money that you have paid on their behalf, and any administrative costs that you may have put forward,” Leavitt told the governors, referring to expenses incurred by states to cover their constituents during the launch period of the program, which began January 1.

More than 40 states took emergency steps since the start of the benefit to ensure that dual-eligibles–individuals eligible for both Medicare and Medicaid–could obtain medications.

Mike McClellan, administrator of the Centers for Medicare and Medicaid Services, addressed the governors later in the conference and reiterated Leavitt’s promise to reimburse states for transition expenses.

Red Tape Caused Problems

“Most of the problems with the launch of the benefit stemmed from government computers not being able to communicate with each other,” pointed out Grace-Marie Turner, president of the Galen Institute.

“Washington and state governments had to match lists of low-income seniors who were moved out of Medicaid and automatically enrolled in one of the new Medicare drug plans. Computer programs weren’t compatible, and names were dropped from lists,” Turner explained. “Some seniors didn’t get their enrollment letters because addresses were out of date. Phone lines were jammed for days with seniors and pharmacists trying to sort out the problems.”

Turner noted the transition problems were typical of government programs. “There’s certainly plenty of blame to go around, including the drug plans’ understaffing of help lines, but the real snafu was, once again, government red tape and paperwork.”

In a February 11 radio address, Bush talked about the transition efforts, saying, “We’re ensuring that drug plans have more up-to-date information on their beneficiaries, and we’re improving data-sharing among Medicare, health plans, and the states. We have also extended the transition period from 30 days to 90 days, to guarantee that seniors do not go without the medicine they need as they switch to a new drug plan.”

Wal-Mart Sends Message

Lee Scott, president and CEO of Wal-Mart Stores, Inc., whose company is being singled out in several states by legislation mandating that a certain amount of money be spent on employee health insurance, spoke to the governors during the conference. Scott announced his company will expand operations in Maryland even though the state has enacted the nation’s first law requiring some employers to spend a certain amount on employee health insurance coverage.

“Wal-Mart has decided to turn the other cheek on Maryland’s ‘Wal-Mart bill’ and is publicly boasting it will expand stores and jobs in the state,” noted Merrill Matthews, director of the Council for Affordable Health Insurance. “The company is, in effect, sending a message to legislators across the country: A few more taxes and regulations can’t hurt us and it can really help you.

“While it is Wal-Mart’s prerogative to expand where it thinks it can make a profit,” said Matthews, “rewarding state legislators for passing bad public policy is the worst message the company could send.”

One of the top four employers in Maryland, Wal-Mart will be required by the law to spend an amount equal to 8 percent of its wages on health care, starting in January 2007.

Reformed Overeaters Speak Out

Former president Bill Clinton, who underwent heart bypass surgery in 2004, gave the closing remarks at the NGA conference. Clinton, who served as NGA chairman during his tenure as Arkansas governor, echoed the warnings of successor Huckabee, whose own health scare prompted him to lose more than 100 pounds.

Clinton urged the governors to join the fight against obesity. “You’ve got to consume less and burn more,” Clinton said. “There is no other alternative.”

Susan B. Konig ([email protected]) is managing editor of Health Care News.

For more information …

Photos and audio and video files from the Winter 2006 meeting of the National Governors Association are available online at