Health Costs Weigh Heavily on Govs

By: - February 26, 2006 12:00 am

Wal-Mart, under attack in state capitols because of claims that many of its employees don’t get adequate health insurance and rely on government help instead, pushed back Sunday by telling the nation’s governors that it will improve some benefits but that the government needs to do more as well.
Lee Scott, chief executive of the nation’s largest employer, told a gathering of the National Governors Association that mandates such as Maryland’s new first-in-the-nation law requiring Wal-Mart to spend at least 8 percent of its labor costs on health care insurance “might score short-term political points, but they won’t solve America’s health care challenge.”
Health care costs crowned the list of concerns on governors’ minds as they prepared to head to the White House for a dinner with President Bush Sunday (Feb. 26) and a private meeting with the president and his Cabinet Monday (Feb. 27).
Several state executives indicated they would press the Bush administration on federal initiatives that would increase costs for the states in Medicaid, the government’s largest health insurer, and on non-health-related programs such as new federal rules covering state driver’s licenses, welfare and child support.
At least 45 governors were expected to be in town for the NGA’s annual winter meeting, at which states traditionally air their concerns with federal officials. Their priorities take on new prominence this election year, with 36 governor’s seats on the ballot this November.
Faced with organized labor’s plan to push proposals like Maryland’s Wal-Mart law in 30 more states, Scott short-circuited some of his opponents by announcing that the company would begin allowing children of part-time employees to be covered by Wal-Mart’s health plan and would cut the waiting period before part-timers can qualify for health benefits.
But he balked at expectations that employers should be held responsible for insuring the health of Americans.
“The soaring cost of health care in America cannot be sustained over the long term by any business that offers health benefits to its employees. And every day that we don’t work together to solve this challenge is a day that our country becomes even less competitive in the global economy,” Scott said.
Scott said he would visit any governor to talk about ways that business could work with government, schools and nonprofit groups to drive down the cost of health care.
File photo
Mike Leavitt, U.S. secretary of health and human services, and a former Utah governor.

Earlier, Mike Leavitt, the U.S. secretary of health and human services and a former Utah governor, also called for a broad overhaul of the nation’s health system.

“There are too many Americans that are without basic health insurance. And those that do have it are paying too much. The fact is the cost of health insurance is eating us up, and we have to get better or get beat,” Leavitt told the governors.
He said, for example, that Medicaid should be better tailored to meet the needs of the different types of people it serves. Medicaid, a joint program between the state and federal governments, provides coverage for poor seniors, families, pregnant women and the disabled.
Arkansas Gov. Mike Huckabee (R), the chairman of the NGA, invited Scott to the forum. Wal-Mart’s headquarters is in Bentonville, Ark. Huckabee has made healthy living the focus of the group’s winter meeting at a time when health care costs are a looming concerns for states.
Medicaid’s fast-growing costs are consuming huge portions of state budgets, and governors are struggling for ways to deliver basic health services to 45 million uninsured Americans and keep afloat Medicaid, which covers another 53 million people.
At the same time, private companies and the federal government are balking at footing the bill for those who already have coverage.

Arkansas Gov. Mike Huckabee (R), chairman  of the NGA, and Arizona Gov. Janet Napolitano (D), NGA vice-chair, at the forum’s opening news conference Saturday. (Photo by Joseph Popiolkowski – )

Scott’s remarks come just weeks after the Maryland Legislature overrode a gubernatorial veto of the measure in January. Almost immediately, organized labor announced that it would push similar proposals across the country. None of those have yet become law, and many face little chance of passage.

“These bills discourage companies from offering quality health care at a lower price. Even worse, they won’t do a single thing to control the cost of health care for working families or their children,” Scott said.
There was wide agreement at the meeting that encouraging Americans to be healthier is one of the most important ways to hold down burgeoning health care costs.
Huckabee wants to combat overeating, smoking and lack of exercise in light of a growing obesity problem among Americans that could push health costs higher and the life span of Americans lower. He’s used his personal story of losing more than 100 pounds and becoming fit enough to run in marathons as inspiration for that change.
California Gov. Arnold Schwarzenegger (R) talked Sunday about the benefits of a healthy lifestyle. (Photo by Joseph Popiolkowski – )

And Gov. Arnold Schwarzenegger (R) of California, the former body-building movie star, told his fellow governors that habits he developed as a child led to his lifetime focus on fitness. Schwarzenegger said his father wouldn’t even let him eat breakfast until he did 200 sit-ups and push-ups because, his father said, “You have to earn your breakfast.”

Leavitt, a former NGA chairman, joined the chorus Saturday. “Health care has to become about keeping people healthy, not just treating them after they’re sick,” he said.
But, when it comes to treating sick people, governors are up in arms over changes the Bush administration proposed for Medicaid in the president’s budget released earlier this month.
The governors complain that the administration’s changes would save the federal government money by simply shifting costs to the states.
“We are for reform. We are not coming to Washington with a tin cup out, with our hands begging. What we are asking for is that real reform will have an equal positive impact on both state and federal budgets,” Huckabee said.
Leavitt, though, said the changes were necessary to keep Medicaid viable.
“We’re partners in this. We pay 57 cents of every dollar,” he said in an interview with .
“And so it’s reason for all of us to say, let’s do things that benefit first the beneficiaries, second of all create sustainability to the program. Right now it’s not sustainable. We all know that. That means the beneficiaries will be hurt in the long run if we don’t act,” he said.
The fate of the National Guard is also near the top of governors’ agendas when they meet with Bush and the Cabinet. Although the administration rescinded an earlier proposal that would have cut the Guard’s troop strength, governors want to prevent the idea from resurfacing.
Kansas Gov. Kathleen Sebelius (D) was one of six Democratic governors who raised concerns Saturday with the Bush administration.
 (Photo by Joseph Popiolkowski – )

At the NGA meeting, they also expressed concerns about how often the Guard is deployed to Iraq and how Guard equipment has been left abroad even after the units come home. States depend on Guard units to help in times of natural disasters. The governors will meet with Defense Secretary Donald Rumsfeld in a separate meeting Monday.

The meeting at the White House also took on additional political significance in an election year in which Democrats hold out hopes of capturing a majority of governors’ offices.  They currently hold 22, to 28 held by Republicans.
At a hotel within sight of the White House Saturday, Democratic governors of six states – Delaware, Iowa, Kansas, New Mexico, Washington and West Virginia – voiced opposition to a host of Bush administration policies.
The governors said federal actions were impeding progress in statehouses on issues ranging from the National Guard, the Medicare prescription drug benefit and the proposed purchase of six U.S. ports by a company controlled by the United Arab Emirates.
Kansas Gov. Kathleen Sebelius (D) called the new drug benefit an “unmitigated disaster” that left some Kansans without proper coverage.
“States are ready, willing and able to provide coverage, to expand coverage, to provide affordable health care but the current policies in Washington that are being imposed on the states make that job much more difficult,” she said.
Huckabee said a record number of participants signed up for this winter meeting. More than 1,000 people attended. Republican Govs. Ernie Fletcher of Kentucky and George Pataki of New York were hospitalized and could not make the trip. Three other state governors did not plan to attend.
– Staff writer Joseph Popiolkowski contributed.

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