Governors report Medicaid accord Plan may help Clinton, Congress strike deal


WASHINGTON -- Leaders of the nation's governors said last night that they had agreed on a bipartisan proposal on Medicaid, one of the major stumbling blocks in the budget impasse between President Clinton and Republicans in Congress.

The governors, at a conference of the National Governors' Association, said they had also made progress toward a compromise on welfare, another major issue in the budget debate.

By themselves, the governors cannot alter Medicaid or welfare policy now set by the federal government. But the White House and Republican leaders in Congress have been looking to them for suggestions about how to overcome the impasse.

Gov. Tommy G. Thompson of Wisconsin, a Republican who is chairman of the governors' association, said he hoped the agreement on Medicaid would be "the catalyst to break the deadlock and get everything else moving."

Under the bipartisan Medicaid proposal approved by the governors, each state would receive a lump sum of federal money, known as a block grant, to finance health care for the poor. But the proposal would guarantee a package of medical benefits, to be defined in federal law, to millions of poor people. The proposal thus strikes a compromise between the desire of many Democrats to keep Medicaid as an entitlement and Republican demands for block grants.

Earlier yesterday, the governors met with Mr. Clinton, who said that he and Congress were close to an agreement on "sweeping welfare reform that is very consistent with what the governors have advocated for years."

Many Republicans in Congress have said they will give serious consideration to any proposal approved by their party's governors. Mr. Clinton said in 1992 that he wanted to "end welfare as we know it," but he vetoed a Republican welfare bill last month on the ground that it was too harsh.

The Medicaid compromise, endorsed unanimously by a group of 26 governors yesterday afternoon, will be put to a formal vote at a meeting of all governors today, just before Mr. Clinton speaks to the organization. Mr. Thompson predicted that it would be approved by the three-fourths majority needed for such action.

Medicaid finances health care for 37 million poor people, including many children and many residents of nursing homes. Governors have a huge interest in Medicaid because it is financed jointly by the federal government and the states, its cost has quadrupled in the last decade and it now accounts for about 20 percent of all state spending. If Republicans succeed in turning much of the authority for Medicaid over to the states, governors will have a larger role in running the program and deciding how to allocate money.

Gov. Bob Miller of Nevada, a Democrat who is vice chairman of the association, said the Medicaid compromise would give states "a lot of flexibility" to design their own health programs for the poor. But he said it would also guarantee coverage for certain groups of people, with an assurance that states would get more federal money if the number of needy people increased because of economic downturns or migration from other states.

Governors outlined their Medicaid proposal to Mr. Clinton at a meeting in the White House yesterday morning. Gov. Roy Romer of Colorado, a Democrat, said, "The president looks with favor upon the concepts we laid out, but he needs to see the details."

The Medicaid compromise was negotiated in the last two months by three Republican governors: Mr. Thompson, John Engler of Michigan and Michael O. Leavitt of Utah; and by three Democrats: Mr. Miller, Mr. Romer and Lawton Chiles of Florida.

Medicaid is a notoriously complex program, and it may take weeks of work for Congress to translate the governors' conceptual agreement into legislative language. The legislation must then be evaluated by the Congressional Budget Office, which will assess its cost.

In his 1997 budget, issued yesterday, Mr. Clinton proposed savings of $59 billion in Medicaid in the next seven years. A proposal offered by Republican governors last week would have saved $85 billion. The bipartisan governors' proposal will presumably generate savings somewhere between those two alternatives.

A detailed summary of the bipartisan proposal, circulated among governors last night, says that Medicaid recipients would be assured of coverage for hospital services, doctors' services, nursing home care, family planning services and supplies, laboratory services and X-rays. But, it says, states would have "complete flexibility in defining the amount, duration and scope of services."

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