No state, much less the federal government, has found an answer to rising health care costs, which seem much more serious now that the states are trying to close huge budget shortfalls, prompting two-thirds to plan cuts to their Medicaid benefits. It is the surest sign yet of surrender in the fight to bring health care costs under control, but two partial answers may give states time to try again to find a more comprehensive solution.

The first is in the U.S. Senate, where Sens. Susan Collins of Maine, Jay Rockefeller of West Virginia, Ben Nelson of Delaware and Gordon Smith of Oregon have reintroduced their plan to temporarily increase Medicaid money to the states. Recognizing that many states are considering cuts to their Medicaid programs because they do not have the revenue to support them, the senators doubled the amount of money originally available through the legislation, and over 18 months would provide $10 billion to increase Medi-caid rates under the Federal Medical Assistance Percentage and $10 billion through social-service block grants. Maine’s share of this would be $128 million – real help at a difficult time.

Maine still would have a large budget shortfall to make up and, because the additional Medicaid rates last only 18 months, it still would have a sizable gap in its next budget. But it is better off than some other states that have experienced major Medicaid reductions from the federal government in the last year. They have had their budgets reduced because reimbursement rates are based on per capita income from several years previous, which now means when incomes were higher and demands on the public health care system lower.

Last year, states cumulatively lost $565 million in federal Medicaid funds compared with what the 2001 rates would have provided them and raised their state shares as a result. Maine, including the 2-to-1 federal match, spent nearly $1.4 billion on Medicaid in 2001.

The second answer comes from the states themselves – nine of them, including Maine, and the District of Columbia have formed a buying cooperative to find better deals for prescription drugs for Medicaid clients and state employees. By managing the drug benefit themselves through a nonprofit entity, the states hope to negotiate better deals from drug companies and avoid paying the financial incentives private benefit managers receive now.

Financed through the Heinz Family Philanthropies, the new plan would combine the buying power of the states and the nonprofit status of the co-op to reduce costs. It is similar to the plan Maine Rep. Tom Allen proposed for Medicare prescription drugs several years ago. Rep. Allen could not attract Republican support for his measure, but it is worth noting that six of the nine governors participating in the states’ plan are Republicans. Their congressional colleagues might ask them why they think it is more important to provide drugs for lower cost rather than close ranks and refuse to consider an idea from outside the party.

Between 1 million and 2 million Medicaid recipients are expected to cut from state rolls this year as states try to balance their budgets. These two proposals will help significantly, but they will matter long-term only if lawmakers use the next year or so to devise more comprehensive reform. Otherwise, states will find themselves in even more trouble soon.