LANSING, Mich. (AP) — Gov. Jennifer Granholm is among a dozen governors heading to Washington this week to begin working on a plan to reform Medicaid for Michigan and other states struggling with skyrocketing health care costs.

The Democratic governor said she wants more flexibility to operate the state-federal program that currently provides health care for one out of seven people in Michigan. She also will push to keep Medicaid cuts out of a plan to reduce the federal deficit.

“We also need some indication from Washington that they will assist us and not make this part of the budget process … because that’s going to give all the cuts to the states,” she told reporters yesterday during a presentation on the state’s Medicaid program.

The governors hope to agree on a health care reform plan and submit it to President Bush and Congress today.

Granholm is looking to the federal government for some help as she finalizes her budget proposal for the upcoming fiscal year, which could be up to $1 billion in the red without any changes. She also is working on a plan to resolve a projected shortfall of about $400 million in this year’s $8.8 billion general fund.

The state is spending $7.5 billion for Medicaid in the current budget year, and there is little wiggle room. More than 70 percent of Michigan’s 1.4 million Medicaid cases must be covered under federal guidelines; the others are covered under state guidelines.

Meanwhile, the federal government is sending less to the states to help with Medicaid, creating an estimated deficit of between $500 million and $600 million in next year’s Medicaid budget.

Granholm said new flexibility is the only way to keep from kicking people out of the program while keeping down costs. She pointed to federal restrictions on co-pays for prescription drugs and other services.

“We would like to be able to offer some populations a more commercial type of package, fewer bells and whistles, fewer benefits, in exchange for the ability to keep them covered,” she said.

State Department of Community Health Director Janet Olszewski pointed out the need for reforms in Medicaid, noting that it’s difficult to get a waiver to bypass certain federal rules. She also said federal officials do not treat all states and proposals the same.

“It’s difficult to have to do more to keep down costs,” Olszewski said.

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