Governors Attack Dole’s Plan for Health Reform : Spending: Bipartisan group criticizes provision in GOP proposal to cap Medicaid payments. Concerns are also raised over Democrats’ measures.

The Republicans’ major health care reform proposal came under bipartisan attack at the National Governors’ Assn. meeting Sunday on charges that it would gouge tens of billions of dollars from state treasuries.

Governors also voiced concern about the fiscal impact of Democratic reform measures at the opening of the three-day conclave. President Clinton’s strategists view the meeting as a key battleground in his effort to prod Congress into overhauling the nation’s health system before its mid-August recess.

But the main focus of criticism Sunday was a controversial provision in Senate Republican Leader Bob Dole’s plan to cap Medicaid payments to states, which subsidize health care for the poor. The attacks set the stage for a rhetorical duel between Clinton and Dole (R-Kan.), when both address the governors Tuesday.

Senate Majority Leader George J. Mitchell (D-Me.) happily joined in the attack on Dole’s proposal. At the same time, he assured the governors that he was in general agreement with their criteria for legislation to help expand and improve coverage without bankrupting states.

Democratic governors led the way Sunday in the assault on the Medicaid cap in Dole’s proposal, which has gained the support of all but five of the Senate’s 44 Republicans. The Kansas senator would use the money to pay for health insurance coverage for low-income groups. But the governors complained that the net result would leave states holding the financial bag, because they would still operate under federal mandates to subsidize health care for Medicaid recipients.

Democratic Gov. Lawton Chiles of Florida, a member of the association’s health care leadership team, estimated the cost of the Dole proposal to the states at $150 billion over eight years. “To me that would be the worst of all things that would happen,” Chiles said.

When Democratic Gov. Roy Romer of Colorado confronted Sen. Don Nickles (R-Okla.) on the issue, Nickles, chairman of the GOP Senate Leadership Committee and a backer of the Dole proposal, said that Republicans were “very receptive” to the governors’ complaints.

Dole said Sunday on CBS-TV’s “Face the Nation” that he is listening to the governors. “We’ll try to work out this cap. We think there are ways we can do it . . . . The last thing we want to do is to tie the governors’ hands, whether they be Democrats or Republicans.”

The governors have long been opposed to any caps on federal spending for Medicaid. And on Sunday, the governors’ association staff belatedly released a letter that said: “Governors could not be more united in their opposition” to the idea of capping Medicaid spending. The letter was signed by Republican Gov. Carroll A. Campbell Jr. of South Carolina, chairman of the association; Democratic Gov. Howard Dean of Vermont, vice chairman; Romer and his Republican co-chairman of the health care team, Wisconsin Gov. Tommy G. Thompson.

The letter was sent to Mitchell and Dole in the Senate, as well as House Majority Leader Richard A. Gephardt (D-Mo.) and House Minority Leader Robert H. Michel (R-Ill.). It also ticked off other health care issues on which the governors have taken a stand. The issues were initially set forth in a policy statement adopted at the February meeting of the governors’ group. These included recommendations for federal insurance reforms and other legislation to assure states the flexibility to experiment with “innovative” approaches to health care.

In addressing the governors, Mitchell referred to most of the items in the letter and said he agreed with them. He also noted the complaint about the Medicaid cap.

“You said you don’t like Sen. Dole’s proposal, and you shouldn’t, because it will devastate your state’s budgets,” Mitchell said. But he warned: “If we don’t enact health care reform this year, that (Dole’s) proposal will be back next year in one form or another.”

Democratic Gov. Robert P. Casey of Pennsylvania, a longtime foe of abortion rights, complained that a number of Democratic measures require that abortions be covered among other benefits.

But on NBC-TV’s “Meet the Press” Sunday, incoming White House Chief of Staff Leon E. Panetta indicated that the Administration would be willing to compromise on the abortion issue, which threatens the passage of any health care bill.

Abortion, he said, is a matter of choice and “should not be imposed by the government one way or the other.” The Administration’s goal, he added, “is to work with both the House and the Senate to try to come up with an approach that, frankly, provides that choice.”

He appeared to be talking about provisions in some of the health plans that allow employers to opt out of covering abortion--as well as a similar escape clause for medical providers.