One size occasionally fits all

September 20, 2005

A funny thing happened on the way to imposing belt-tightening reforms on Medicaid. Hurricane Katrina suddenly made health care for the poor, disabled and homeless more vital than ever and is prompting a speedy, if temporary, expansion.

The Bush administration, desperately trying to hold back what little it can of the flood of federal spending in Katrina's wake, wants to limit Medicaid expansion to states particularly affected by the influx of evacuees. Texas has been promised extra federal help with Medicaid, which is jointly financed by state and federal governments. Other states were invited to apply for the same.

But the Senate Finance Committee has a better idea: to create a temporary Medicaid disaster program nationwide. Thus, those dislocated by Katrina can get the same help in whatever state they land for at least five months and perhaps 10, and the federal government will pick up the whole tab.

This won't come cheap - up to $5 billion, by some early estimates, compared with $350 million for the more limited program in Texas. But if each of the other states is required to negotiate its own terms for federal help, as Texas did, a good bit of money and time will be wasted on bureaucratic red tape. And if Medicaid rules are not suspended everywhere to allow Katrina victims to get Medicaid benefits in other states, the resulting denial of services for which they can't pay would be utterly inconsistent with the compassionate approach to relief and recovery President Bush promised last week.

A Senate vote is expected within days on the bipartisan Finance Committee measure, which also provides emergency welfare funds for the storm-struck states and extends unemployment benefits to jobless Katrina victims. With a signal from Mr. Bush, it would pass easily and win approval from the House as well.

Critics of the Senate approach say if the federal government is paying the full cost of disaster Medicaid benefits, states will have little incentive to impose the tight controls needed to guard against fraud and abuse. They also worry that a temporary program much looser in its eligibility requirements than many of the state Medicaid rules would ultimately become permanent. But such issues can be addressed in the legislation, and again, if necessary, when Congress returns to its task of overhauling Medicaid later this year.

Health care costs are growing so rapidly for America's aging population that Medicaid was on the verge of bankrupting states before Katrina struck. Yet when medical services were suddenly needed by a huge transient and impoverished population, only Medicaid would do.

This temporary expansion should be used as a time to experiment with innovations to make Medicaid more nimble and more efficient, whatever its role in the future.

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