CHICAGO - Reacting to President Bill Clinton's health-care reform address, some state officials yesterday expressed concerns about the impact of the plan on state budgets.
On Wednesday, Clinton unveiled his long-awaited plan to provide health-care insurance to 37 million uninsured Americans and to rein in spiraling health-care costs.
However, he discussed few details about how the plan would be funded, except for a proposal to increase so-called sin taxes. Clinton also did not address the impact of reforms on state Medicaid programs.
Some municipal market observers said that the plan could increase the financial burden on states because of additional administrative procedures and cutbacks in the future growth of Medicaid programs, which provide health care for the poor. However, other market observers said that efficiencies, such as curbing insurance costs for government workers, could offset those losses.
The National Governors' Association in a press release said that the "exact nature" of the President's Medicaid proposal is uncertain. The association said that certain aspects of Clinton's plan, including the expansion of some programs, could have a negative impact on the fiscal condition of states.
"States must be financially protected from any mandates or program expansions imposed by the federal government," the association said.
Republican Gov. Jim Edgar of Illinois praised Clinton's efforts, but said that the President did not address the potential effect the plan could have on state budgets.
"The President's plan on how to pay for health-care reform is vague and questionable," Edgar said in a press release. "I have a major concern that costs will continue to be shifted from the federal government to the states, especially given the track record of the majority in Congress, which has imposed mandate after mandate on the states in the health-care area without providing funds to pay for them."
Gov. Terry Branstad of Iowa, also a Republican, said that any decreases in federal Medicaid funding under national reforms could hurt rural states, according to Richard Vohs, Branstad's spokesman.
"There is currently discrimination on Medicaid reimbursement against rural states," Vohs said. "Iowa has one of the lowest Medicaid reimbursements in the nation. If this is not corrected, this plan could be devastating to states like Iowa."
Other governors are hopeful that the plan will give states flexibility in implementing their own reforms. They expect the state-related questions to be resolved in Congress.
"As the the plan moves through the legislative process, we expect to remain an active player in its development," Democratic Gov. Lawton Chiles of Florida said in a press release. "Although some important questions remain, we have enjoyed a productive relationship with both the administration and members of Congress, and we expect those questions to be resolved."
Democratic Gov. Mario M. Cuomo of New York said in a release, "The President has taken the most important step - the first step. But it is the responsibility of all of us to guide the next steps."
County officials pointed out that Clinton did not discuss how counties would be assisted by the plan.
Cook County, Ill., commissioner John Stroger said that the national reform plan must incorporate provisions that will help decrease counties' cost of providing health care for the poor. He noted that the nation's counties spend about $33 billion annually on such care.
Meanwhile, rating agency officials are taking a wait-and-see stance toward the impact of the reforms on state and local governments.
Joan Pickett, a director at Standard & Poor's Corp., said that Clinton did not address how state reform initiatives would fit into the national plan.
"We got the framework, but we need more details before we can delve into what the implications are going to be," Pickett said.
Renee Boicourt, a vice president and assistant director in the state ratings group at Moody's Investors Service, said that controlling rising health-care costs would benefit states.
Fred Martucci, a managing director at Fitch Investors Service, said that the additional administrative costs anticipated under national health-care reforms could place a significant financial burden on states.