Declining tax revenues in many regions are on a collision course with skyrocketing healthcare costs

One prime example--proposed changes in medical coverage affecting millions of Americans.

CBS's John Roberts has more about the politics of healthcare.

"I look forward to this discussion today to discuss how best to devolve authority back to the states," says President Bush.

From the president this morning, that's talk that is usually music to governors' ears, but now Mr. Bush's former colleagues are balking at one of his cornerstone plans--billions of dollars in block grants to provide immediate prescription drug coverage for the nation's neediest seniors.

Only a handful of states have programs in place to deliver on Mr. Bush's proposal. Others cringe at the thought of yet another expensive entitlement and worry that when the federal grants - http://www.superghostblogger.com/?s=federal%20grants end, they'll get stuck with an enormous bill that grows at 15% a year.

It's the second big hit for the president on seniors' healthcare. The chairman of the powerful senate finance committee has already signaled he'll use plans for a national drug benefit, written by Senators John Breaux (D-LA) and Bill Frist (R-TN) as his roadmap for Medicare reform.

"The single most alarming issue in most of our budgets is the growth in the Medicaid cost," says Governor Parris Glendening (D-MD).

While states would rather leave prescription drugs to Congress, they do want more authority over Medicaid, the state-run system that looks after healthcare for poor Americans. Declining tax revenues - http://hararonline.com/?s=revenues in many regions are on a collision course with skyrocketing healthcare costs.

"For some states, we think this is going to mean a tight budget. For other states, it's going to be a crisis," says Glendening.

Governors have proposed a radical restructuring of Medicaid--asking for the power to redesign programs, streamline costs, and expand coverage with a package of more modest benefits to people with higher incomes.

While President Bush is all for giving more say to the states, he has no immediate plans to reform Medicare and Medicaid--preferring instead to focus on his trademark issues of education and tax cuts. And while he will include money for an immediate prescription drug benefit in his budget, no one here expects seniors will see a dime of it.

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