Fearing wholesale cuts in Medicaid by states with severe budget problems, the Obama administration told governors on Thursday how they could save money by selectively and judiciously reducing benefits, curbing overuse of costly prescription drugs and attacking fraud.
However, the administration refused to say whether it would allow states to adopt stricter eligibility standards that would, in effect, throw low-income people off the Medicaid rolls and eliminate their insurance coverage.
Kathleen Sebelius, the secretary of health and human services, said she was still studying that question.
Governors said the ideas, though constructive, were not nearly enough. They said they wanted waivers of some federal requirements and relief from Congress, and they noted that the new health care law would greatly increase Medicaid rolls in 2014.
In a letter to governors on Thursday, Ms. Sebelius said, “I have heard the urgency of your state budget concerns.” Ms. Sebelius emphasized that states already had substantial discretion to alter benefits and establish or increase co-payments. (more…)