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Clinton Addresses Medicaid, Economy

By Ann Devroy and Dana Priest
The Washington Post

President Clinton Monday promised the nation's governors he would give them more flexibility in the way they provide health care to indigent residents under Medicaid, and he revealed he plans to spend $30 billion to boost the economy when he unveils his economic package later this month.

Clinton's more-than-two-hour session with the governors at the White House, extraordinarily long by the standards of past presidents, allowed him to shift public focus back to his major campaign themes: preparing his economic program for its Feb. 17 State of the Union presentation, writing his budget for his first budget submission on March 23 and starting extensive work on health care reform.

Clearly sensitive to the Medicaid issue from his years as a governor, Clinton said the states were required to wait too long, fight through a rules process too complex and duplicate each other's efforts in seeking to provide the most cost-effective health services they can under the federal Medicaid rules.

To remedy that, he said he had directed the Department of Health and Human Services and the federal Health Care Financing Administration to cut back -- to one -- requests to the state for more documentation and clarifications of request for waivers. He has also asked for establishment of a list of innovative state programs that would become available to all states once one had received federal approval and for an overall review of the process by which states get waivers from federal Medicaid rules.

But Clinton stopped short of actually granting exemptions or waivers to states attempting comprehensive health reform -- Florida and Oregon among them.

According to two Republican governors, Carroll A. Campbell Jr. of South Carolina and William F. Weld of Massachusetts, Clinton told the group that his package to stimulate the economy will reach $30 billion, half in direct government spending on projects such as road building and half on tax credits to business and industry.

Officials last week estimated the package would be $20 to $25 billion. Although Clinton did not say so, it was assumed the package would increase the overall deficit by the $30 billion the first year and be accompanied by a deficit reduction package for later years.

The governors said Clinton told them the White House wants to fund projects that can be started within 60 days. Clinton was handed what amounts to a governor's wish list -- $6.5 billion in transportation projects that are ready to go under last year's transportation bill.

The governors praised Clinton's effort on Medicaid and his pledge to include their representatives in his health care task force headed by Hillary Rodham Clinton. She and Tipper Gore, wife of the vice president, attended the governors' session at the White House.

Medicaid, the state-federal program that provides health care to poor and disabled Americans, is the fastest growing part of most states' budgets and accounts for as much as 20 percent of some states' spending. Combined federal and state spending for Medicaid has doubled since 1989 to $140 billion this year.

In an effort to hold down health care costs, states want to experiment with nontraditional ways to provide health care to the poor.

Some states, for example, would rather allow elderly recipients to live at home with the assistance of nurses than to live in nursing homes required under Medicaid rules. Others would like to use Medicaid to cover uninsured children and pregnant women whose household income is too high to qualify but too low to pay for preventative and primary care.

To try such experiments, a state must obtain a waiver from Health Care Financing Administration in a process that can take years. Clinton, in his first meeting with former President George Bush after his election, complained to him about Medicaid rules, he told reporters then.

In addition, sources said Clinton and the governors are close to an agreement on allowing as many as 32 states to collect up to $340 million more in federal Medicaid grants this year than was allowed by the Bush administration. The money goes to reimburse hospitals that serve an unusually high volume of indigent patients.

Clinton also discussed health care reform with the governors, but only in broad terms.

As he puts together his spending plans, Clinton on Thursday will be informing departments and agencies of the deficit projections and economic stimulus decisions he has made for his first budget, and those officials must file appeals by Monday.