The joint federal-state Medicaid program for the poor would not be cut under President Bush’s budget proposal, U.S. Health and Human Services Secretary Michael Leavitt told a Senate Committee Wednesday.

“This budget will reflect 7 percent more in Medicaid dollars over the next 10 years,” Leavitt told the Senate Appropriations Subcommittee on Labor, Health and Human Services, and Education. “We just want it to grow two tenths of 1 percent slower.”

Leavitt also said he is making good progress working with the nation’s governors on proposals to spend Medicaid dollars more efficiently.

The budget blueprints now under consideration in the U.S. House and Senate assume Leavitt and the governors will be able to reach an agreement by late summer, in time for lawmakers to write the changes into law before the new fiscal year begins October 1st.

“It is safe to say there is broad, if not unanimous support” among the governors for several elements of an emerging reform plan, Leavitt said. Those include a change in the way Medicaid pays for prescription drugs; efforts to prevent people from transferring assets to qualify for Medicaid-paid nursing home care; allowing states to charge “copayments” for medical care to wealthier Medicaid beneficiaries; making long-term care more widely available in homes rather than institutions; and allowing states to change the mix of benefits offered.

Leavitt said he is confident a deal can be reached, and thus opposes an amendment to the budget that the Senate is expected to take up Thursday. It would eliminate the proposed $15 billion in Medicaid reductions and instead create a commission to come up with a reform proposal in time for consideration in 2006. “I started participating in this discussion in 1995,” he said, when he was governor of Utah. “The problem has only gotten 10 years more mature. The governors desperately need these reforms,” he said.

But several senators at the hearing said they are not convinced by Leavitt’s claims that states can serve more people if they are freed the “rigid inflexibility” of Medicaid’s rules. “Every time someone around here says the word flexibility, I reach for my wallet, because flexibility always means less money,” said Sen. Richard Durbin, D-Ill.

Sen. Patty Murray, D-Wash., said she was pleased that the President’s budget calls for more money for community health centers, but she complained that other reductions, particularly those for Medicaid, could undermine the job those primary care clinics do. “Medicaid is 30 percent of health centers’ revenues,” Murray said, “so any cuts to Medicaid will have an impact.”