State Medicaid Watch: New York
Another major fight is likely to occur over Medicaid, the nation's largest health insurance program, covering the poor and the disabled at a cost of more than $300 billion a year to both the states and federal government.
The Bush administration is considering a wide range of initiatives to curb the growth of Medicaid spending, at the same time that Mr. Bush has pledged to cut the federal budget deficit by half in five years.
Republican leaders on Capitol Hill say the president's deficit goal is almost impossible to achieve without addressing Medicaid. But any changes to the program will have a huge impact in New York, where Medicaid provides health care to more than three million people at a cost of about $42 billion a year.
The Bush administration has not said how it intends to deal with the issue. But officials in many states, including New York, say they believe the administration will try the same approach it did in 2003, when it proposed giving each state a fixed amount of money, known as block grants, each year for 10 years, instead of basing federal payments on actual health costs and enrollment.
Both Republicans and Democrats in New York are concerned that the block grants will translate into huge cuts that, in turn, will affect poor and wealthy communities across the state. New York hospitals, nursing homes and other health care institutions have long used Medicaid dollars to help cover their overall costs.
Many New York politicians agree that the person best suited to argue the state's Medicaid case in Washington is Gov. George E. Pataki, a Republican with ties to the White House who has not publicly stated where he stands on the issue.
Republicans close to the Pataki administration say, however, that the governor may be willing to embrace an overhaul of the federal program, like the block-granting approach, if it gives him the leverage to force the State Legislature in Albany to curb the rapid growth of the state's own Medicaid program.