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LEAVITT LEADS DRAFTING OF A MEDICAID FORMULA

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Because Gov. Mike Leavitt leads the fight by states for more power, GOP congressional leaders gave him the nasty job of negotiating a formula by states to divide Medicaid funds.

Leavitt said Wednesday that after eight tough weeks of negotiating among states and the House and Senate, the formula is nearly complete. But his tough assignment may prove the adage of being careful what you ask for because you may get it."We are very close. But we still have a few issues to work out," a tired-looking Leavitt said after another full day of negotiations, speaking at a press conference flanked by other governors, House Speaker Newt Gingrich and Senate Majority Leader Bob Dole.

The new Republican Congress has vowed to turn over Medicaid - the federal/state health program for the poor - entirely to states through block grants and to cut requirements on how to spend the money and whom to serve to allow greater flexibility.

A problem with that, however, was how to divide the block grants among the states. Dole and Gingrich decided to let the states settle that themselves by asking Leavitt - chairman of the Republican Governors Association - to resolve it.

Leavitt said problems arose because high-growth states - like Utah and Texas - do not want to be tied into formulas that will not provide a greater share of money as the number of their poor increases.

States that will have little growth and have historically given more lavish benefits don't want to tie funds to growth but to state expenditures per person. Others fear that could reward inefficiency or big benefits.

To try to solve it, Leavitt appointed a committee of three high-growth states, three low-growth states and three moderate-growth states and himself.

The panel came up with a formula that Leavitt presented to other governors and congressional leaders Wednesday in regular quarterly meetings in Washington.

Leavitt said states have managed to agree on about 90 percent of the issues but need to resolve some remaining problems. He said he would not discuss exactly what they are - but expected the formula to be ready in a week or so.

"Formulas do not lend themselves to consensus. But I think this is one on which I think we can get 90 percent of states feeling pretty good about it," Leavitt said.

"This is not an easy process. This is not talking philosophy. This is dividing up real dollars," he added.

But Dole and Gingrich said states wanted to be treated like equal partners with Congress, and giving them power and responsibility to come up with the formula helps do that.

Dole said, "We said a year ago that this would be a partnership, and that partnership is still working."

Leavitt noted that allows states to weigh in on other concerns, too - including stressing in meetings Wednesday that Congress should include as few mandates on Medicaid as possible to allow states to be creative in seeking ways to save and be efficient.

The governors also used meetings Wednesday to stress they unanimously oppose attaching such strings to welfare reform - just as the Senate voted to reject conservative strings that would have prevented extra benefits for families who have babies while on welfare.

Governors say such decisions should be left to individual states and not mandated by Congress.