Wednesday, February 02, 2005

Leavitt Sees $60 Billion in Medicaid Savings

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Ceci Connolly, writes in the Washington Post, that the new Health and Human Services Secretary Mike Leavitt

said yesterday that $60 billion can be saved over the next decade in the Medicaid health program for the poor by closing loopholes, prohibiting "accounting gimmicks" by states and eliminating wasteful spending on items such as overpriced prescription drugs.
Leavitt assured his audience that there would be no cap on mandatory benefits under Medicaid, but that left in limbo the question of what the administration might do about such optional services as prescription drugs.


Diane Rowland, executive vice president of the nonpartisan Henry J. Kaiser Family Foundation, said that because children are the largest group of mandatory beneficiaries, Leavitt's comments seemed to indicate "the potential goal here is to reduce spending on the aged and people with disabilities, who tend to be classified as optional and are the most expensive."
Unfortunately, details of that $60 billion in savings are elusive.

He promised aides would provide details on the $60 billion in savings. But a staff e-mail later said only: "The estimated savings numbers used in the speech are formal HHS estimates and can be attributed as such."


The Texas Health and Human Services Commission publishes an annual report on Medicaid in Texas, the most recent called Medicaid in Perspective 2004. In Chapter 5 (p. 16), a pie chart shows the federal budget expenditures for FY 2003. Medicaid and CHIP combined comprise 8 percent of spending. (Interestingly, interest on the national debt comes in at 7 percent, which is almost as much as Medicaid.) According to the Texas Fact Book 60.5 per cent of the federal funds that Texas received in FY 2004-2005 were for health and human services ($23,729.4 million).

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