Quote of note:

Gov. Kathleen Sebelius of Kansas, a Democrat, said: "Governors are very willing to come to the table to discuss a comprehensive solution but are very leery of the budget number proposed by the president. If the flexibility comes with $60 billion worth of cuts, that will give us the flexibility to cut people off health care that they desperately need."

Governors and Officials Step Up Talks on Medicaid

By ROBERT PEAR

WASHINGTON, March 1 - Governors and the Bush administration agreed on Tuesday to intensify negotiations on ways to clamp down on Medicaid costs after four days of talks sputtered to an inconclusive end.

Michael O. Leavitt, the secretary of health and human services, said he saw 8 to 10 "areas of potential common ground" with the governors.

Gov. Mark Warner of Virginia, a Democrat who is chairman of the National Governors Association, said, "We have a growing consensus on some principles," but no agreement on details. The sentiment of most governors is, "Let's plunge ahead" with further negotiations, he said.

Medicaid provides health insurance for more than 50 million low-income people, pays for more than one-third of all births, and finances care for two-thirds of nursing home residents. The cost of the program, financed jointly by the federal government and the states, shot up 63 percent in the last five years. For more than two decades, federal and state officials have been engaged in a tug-of-war over who should pay how much of the cost.

"If we don't do something, people in this country who are currently served by Medicaid will lose their health coverage," Mr. Leavitt told the National Governors Association on Tuesday at the end of its four-day winter meeting.