Madam President, I rise to address a very important issue in regard to the health care of our poorest Americans and discus my plan, the Medicaid Accountability and Care Act, or the MAC Act, which is also included in my ObamaCare…
Madam President, I rise to address a very important issue in regard to the health care of our poorest Americans and discus my plan, the Medicaid Accountability and Care Act, or the MAC Act, which is also included in my ObamaCare replacement plan which would address the failings of our current Medicaid system. My colleague from Washington just extolled the virtues of ObamaCare. As she pointed out, Medicaid clearly is a major part of the ObamaCare kind of response so it is apropos I would follow.
I wish to first tell you my perspective. I am a physician, and I had been working in a hospital for the uninsured for 25 to 30 years, until they blew it up. I saw prisoners, the uninsured, and Medicaid patients. You might say: Wait a second. Medicaid, it is insurance. Why would somebody with Medicaid insurance be seen at a hospital for the uninsured?
It is because in my State, like in most others, Medicaid pays beneath the physician's cost of seeing a patient. To paraphrase Saint Paul, it is the illusion of coverage without the power of access.
I will point out, the week ObamaCare passed, there was an article in the New York Times, written by a very respected journalist, Robert Pear, tracking a Medicaid patient in Michigan. The physician, the oncologist seeing her, had so many Medicaid patients, the oncologist was going bankrupt because she could not afford to pay her bills so she had to discharge the Medicaid patients from her practice.
I followed up to find out what would happen, and 2 weeks after being discharged from this oncologist's practice, the patient died. This is Medicaid, which is so critical to the purported success of ObamaCare.
Is it that we are not spending enough money; that maybe if we just spent a little bit more on Medicaid it would all be better.
A study from MIT found that 60 percent--let me stop. The State of Oregon did an expansion of Medicaid so researchers from MIT and elsewhere went to study it. This study found that 60 percent of the dollars used for the Oregon Medicaid expansion went to institutions, not for patients--as little as, say, 20 percent to 40 percent--but as little as 20 percent of the money that was put toward the Medicaid Program actually was a benefit for the patient. Let me repeat this. As much as 60 percent went to benefit institutions, not patients. They also found that patients on Medicaid did not have improved outcomes. Think about this. We are giving everybody all of this coverage. It is supposedly wonderful. Yet when they went back 1 year later and 2 years and 3 years later and looked at the patients covered on Medicaid-- versus those who were not, those who continued to be uninsured--there were no better health outcomes among those who are on Medicaid.
If we can't agree this is a program to reform, it is going to be hard to agree on anything.
For those who are not familiar with Medicaid, let's talk a little bit about the program. Medicaid is a Federal-State program. The Federal Government provides a certain percentage--a different percentage for each State--but the State actually administers the program. In some States, the Federal Government pays 50 percent of the cost. It can go up as much as 75 percent of the cost. In Mississippi, they put up $25, they get $75. In a State such as New York, they would put up $50 and get back $50 so it is a 1-to-1.
This open-ended financing structure is based solely on how much the State spends. I will agree with my colleague from Washington State. We should not reward States that spend incontinently. We should not reward States that just spend, but under Medicaid, the State is rewarded. The more it
spends, the more it draws down from the Federal Government.
I always smile when people speak about the economic development of Medicaid expansion. Medicaid expansion is not about economic development. It should be about taking care of patients, but I understand that perspective because they pull down at least $1 for every dollar the State spends, sometimes at the 75-percent ratio. Under the ObamaCare Medicaid expansion, States have been drawing down 100 percent of what they spend. If the State is going to draw down 100 percent of what it spends on the Medicaid expansion population-- surprise, surprise--they are actually spending at a higher rate on the expansion population than on those Medicaid patients for whom the State actually has to cover part of the cost.
The Federal Government has very little ability to weed out the corruption of the inefficient programs. Again, this matching incentive disincentivizes States from looking for ways to be more efficient, but, still, States have to balance their budget every year and Medicaid is either the second largest or largest budget item in every State. Even though the Federal Government is paying 50 percent to 75 percent of the traditional Medicaid population and 100 percent of the expansion population, the State taxpayer is still on the hook for a lot. On average, States spend 17 cents of every State dollar on Medicaid. My State of Louisiana has the highest percentage. Nineteen percent of our budget goes to Medicaid. The percentage is steadily increasing, nearly doubling since 2000. Sooner or later, even though the Federal Government covers the majority of the cost, the budget crunch gets more difficult because the rate of Medicaid spending is climbing faster than the State tax base.
Because of all the Federal requirements on what a State can change in the Medicaid Programs, in order to come up with the State match, States have two options. They can pay providers less or they can cut other programs such as education and move the money to the Medicaid Program.
First, paying physicians less brings us back to the situation Robert Pear described in his New York Times article, where the oncologist was going bankrupt because she could not afford to see more Medicaid patients.
Let's speak a little bit about education. I am just going to use my hands. In 1963, the State government used about that much for education and when Medicaid started in 1964 or 1965, about that much for Medicaid. In 2009, for the first time ever, on average, States spent more on Medicaid than on education. Now the percentage on Medicaid continues to climb, if you will, cannibalizing the State dollars that could be used to support higher education, primary and secondary education.
Let's look at the effect of the ObamaCare Medicaid expansion. Let's look not at my own State but Kentucky, a State which has been at this for a little bit longer. The previous Governor, Governor Beshear, implemented the ObamaCare Medicaid expansion---just kind of traditional Medicaid--and expanded it.
Again, my colleague from Washington State was extolling how much ObamaCare has lowered costs. When Kentucky originally implemented it, they expected the long-term cost of Medicaid expansion to be only a 4- percent increase in their current State spending on Medicaid. After only 1 year of the expansion, updated projections showed the expansion cost the Federal Government more than half a billion dollars more than Governor Beshear had projected for 2014, and this will double in the coming years, meaning that the Medicaid expansion will cost $1 billion more per year than expected. Again, this was the projected cost. This is the actual cost.
If this is saving money--oh, my gosh. What would happen if we actually lost money? By anybody's calculation, this is losing money. This has been the situation across the country. States that have expanded Medicaid have turned out to be far more expensive for the Federal taxpayer than originally anticipated. Again, it just isn't a Federal program. Like many other States across the Nation, Kentucky is facing serious fiscal issues. They do not have $1 billion lying around.
On its current path, Kentucky's own projections suggest the State will start losing $45 million in perpetuity beginning in 2021. This is a 10-percent increase. The Federal Government is putting up most, but Kentucky itself will have to put up an extra $45 million per year.
Also, given that the Federal taxpayer--you and me, us, the people watching on TV and in the Gallery--given that we, the Federal taxpayer, put up 90 percent of Kentucky's costs--well, every State's costs, we just happen to be speaking about Kentucky--but every State's costs are 90 percent of the costs in perpetuity. As this cost grows, taxpayers are on the hook for 90 percent of it. Such a deal.
It doesn't have to be this way. Let me compliment Indiana. When Vice President-Elect Mike Pence was Governor of Indiana, rather than adopting kind of ObamaCare's let's do the traditional Medicaid and watch the cost explosion--he took an innovative approach and created the Healthy Indiana Plan or HIP as an alternative to simply doling out the dollars. The plan gave each beneficiary a high-deductible plan in combination with a health savings account. It was capitated. Again, my colleague from Washington who just spoke kind of criticized these capitated plans, which means there is a set amount, and the person is, if you will, engaged in managing her dollars.
The State will put up a certain amount on a sliding scale based upon the income of the Hoosier who enrolled. The plan empowered low-income enrollees to become better consumers of health care. Hoosiers who participated--for those not from Indiana, I have learned you don't say Indianans, you say Hoosiers. So Hoosiers who participated changed behaviors. They use 40-percent less charity care than traditional Medicaid patients. Seventy percent contributed to their own HSA. Once they started contributing, virtually all continued to do so regularly. That is despite 83 percent of those participants in the Healthy Indiana Plan earning less than the Federal poverty level. Those Healthy Indiana Plan patients also saw clear improvements in care over traditional Medicaid. They decreased their emergency room utilization by 40 percent relative to Medicaid's average. Thousands more physicians chose to take Medicaid patients. Remember, at the beginning, I discussed how physicians often can't see Medicaid patients. It pays them below the cost of their seeing patients. In Indiana, thousands more chose to take Medicaid patients, improving access to quality care. Clearly, the Healthy Indiana Plan was able to work for Indiana patients. This is the sort of quality innovation that States can devise if we give them the power.
Now, revising the current funding structure would also encourage States to follow Indiana's example and develop innovative Medicaid programs to increase the efficiency in which the program spends money. Again, that is Federal taxpayer money. That is our money. For those watching right now, it is our money. We want to encourage States to be efficient with how they spend it. There should be greater flexibility to design the Medicaid program to better meet the needs of State residents. States will be given the latitude and the freedom to develop various coverage options and specialized delivery systems for different Medicaid patient populations.
This is why I developed the Medicaid Accountability and Care Act, which we call the MAC Act. It reforms the flawed financing of Medicaid by giving each State a set amount according to how many people each State has enrolled in the different categories that each State's Medicaid program treats. That is a mouthful, but it is basically exactly like the Federal Employees Health Benefits Program or like any employer who goes to an insurance company and says: I want to give you a set amount of money per employee who enrolls in your plan. For that matter, it is like Medicaid managed care, where the State will go to a managed care company and give the managed care company a set amount per enrollee in that plan.
Now, I hear people say: Oh, my gosh, it is a set amount. That is all we do in health care, except in Medicaid, where we reward inefficient spending. So if it is good enough for the State to do it to the Medicaid managed care program, why isn't it good enough for the Federal taxpayers to do it to the State? I
am not quite sure I understand the critics of this approach.
But, again, under the Medicaid Accountability and Care Act, or the MAC Act, each State would tell the Federal Government how many beneficiaries it has in different categories of Medicaid and the Federal Government would give each State the amount of money appropriate for that number of enrollees in each category. The advantage of this is it is a set amount. It allows the Federal Government to do that, which it does not do now; and that is, to say to the State government: If you recover fraud, you can keep that money.
Now, let's go back. Under the current situation, the Federal taxpayer pays 50 to 75 percent of the State's Medicaid costs. If there is fraud--and there is lots of fraud in Medicaid--and the State government recovers it, it has to give back to the Federal taxpayers whatever the percent was the Federal Government put up. So if the State goes out and recovers $1 million--spends money on the attorneys, spends money on the investigation, on the court case, and it recovers $1 million--it has to give half a million to $750 million back to the Federal taxpayers. It is responsible for the prosecution, the investigation, but it gives most of the money back to the Feds. So the States don't investigate because it is a disincentive to go after fraud.
Under the MAC Act, if the State goes out and gets $1 million worth of fraud, the State keeps the money. That is good for the State. It encourages the State to root out that fraud and to keep the money and to make sure that fly-by-night scam artists never get to become Medicaid providers in the first place.
The MAC Act's reforms will result in improved health care for Medicaid patients.
I will go back to where I started.
I am a physician who worked in a hospital for the uninsured and Medicaid patients. These are my patients. If this proposal was not about improving patient care, I would not advance it. But recall that Oregon, with their Medicaid program, upon review by MIT, found no improvement in patient outcomes. Then let's go to Indiana, which actually set up health savings accounts and engaged the patient in managing their own health, and there, we do see better outcomes. We should all be about patients having better outcomes.
Along the way, we do other things, such as equalizing the amount of money the Federal Government gives to each State per beneficiary. Again, my colleague from Washington State pointed out that folks in Washington get less money from the Federal Government than do other States. I would attempt to equalize that with the MAC Act.
So let me finish. The American people have been voting against ObamaCare for the last 8 years. Whatever its proponents may say, the American people have found it wanting. One aspect of it that has been wanting is Medicaid. We have a proposal before us based upon my experience of treating patients in the hospital for the uninsured and Medicaid but also taking States like Indiana and elsewhere in which we attempt to give States the initiative to create specialized programs that focus on patient-centered care. In that way, we will see better outcomes. The current Medicaid funding system under ObamaCare works against States, penalizing them for addressing fraud, abuse, and waste. This must change. We need to change this broken framework with a system that will work with States to get their Medicaid programs back on track, benefiting their patients as much as possible.
With that, I yield the floor.
Madam President, I suggest the absence of a quorum.