Madam Speaker, I rise today to express concerns regarding health reform proposals which would create unfunded state mandates. Legislation currently before the House would dramatically expand the Medicaid program and place over $35 billion…
Madam Speaker, I rise today to express concerns regarding health reform proposals which would create unfunded state mandates. Legislation currently before the House would dramatically expand the Medicaid program and place over $35 billion in new liabilities on state budgets over the next ten years. In addition, these proposals would expand the federal government's role in administering Medicaid, which would severely handcuff states' ability to run their own programs and preempt state authority to manage Medicaid eligibility and benefits.
Over the last several weeks, governors have expressed concerns over these proposals. I would like to submit for the Record the following letters from the governors of California and Florida:
July 31, 2009.
Hon. Harry Reid,
Majority Leader, U.S. Senate,
Washington, DC.
Hon. Mitch McConnell,
Minority Leader, U.S. Senate,
Washington, DC.
Hon. Nancy Pelosi,
Speaker of the House, House of Representatives,
Washington, DC.
Hon. John A. Boehner,
Minority Leader, House of Representatives,
Washington, DC.
Dear Senator Reid, Senator McConnell, Madam Speaker and Mr.
Boehner: I appreciate your commitment and hard work toward
reforming the nation's health care system. I think we can all
agree that the current system is not working as it should,
and I have long supported a significant overhaul. Costs
continue to explode, while tens of millions remain uninsured
or underinsured. Many families are one illness away from
financial ruin--even if they do have insurance.
We have the greatest medical technology in the world at our
fingertips, yet Americans' health status lags behind many
countries that spend less than half what we do per capita.
Any successful health care reform proposal must be
comprehensive and built around the core principles of cost
containment and affordability; prevention, wellness and
health quality; and coverage for all.
Cost Containment and Affordability
Cost containment and affordability are essential not only
for families, individuals and businesses, but also for state
governments. Congress is proposing significant expansions of
Medicaid to help reduce the number of uninsured and to
increase provider reimbursement.
Today, California administers one of the most efficient
Medicaid programs in the country, and still the state cannot
afford its Medicaid program as currently structured and
governed by federal rules and regulations. The House
originally proposed fully funding the expansion with federal
dollars, but due to cost concerns, members decided to shift a
portion of these expansion costs to states. I will be clear
on this particular proposal: if Congress thinks the Medicaid
expansion is too expensive for the federal government, it is
absolutely unaffordable for states. Proposals in the Senate
envision passing on more than $8 billion in new costs to
California annually--crowding out other priority or
constitutionally required state spending and presenting a
false choice for all of us. I cannot and will not support
federal health care reform proposals that impose billions of
dollars in new costs on California each year.
The inclusion of maintenance of effort restrictions on
existing state Medicaid programs only compounds any cost
shift to states. We simply cannot be locked into a cost
structure that is unsustainable. Governors have three primary
ways to control Medicaid costs: they can adjust eligibility,
benefits and/or reimbursement rates. Maintenance of effort
requirements linked to existing Medicaid eligibility
standards and procedures will effectively force state
legislatures into autopilot spending and lead to chronic
budget shortfalls.
The federal government must help states reduce their
Medicaid financing burden, not increase it. A major factor
contributing to Medicaid's fiscal instability, before any
proposed expansion, is that the program effectively remains
the sole source of financing for long-term care services.
Therefore, I am encouraged by congressional proposals that
create new financing models for long-term care services.
Proposals that expand the availability and affordability of
long-term care insurance are steps in the right direction,
but they must be implemented in a fiscally sustainable way.
More fundamentally, however, the federal government must take
full responsibility for financing and coordinating the care
of the dually eligible in order to appreciably reduce the
cost trend for this group. This realignment of
responsibilities is absolutely essential to controlling costs
for this population, while ensuring that state governments
will be better positioned to fill in any gaps that will
undoubtedly arise from federal health care reform efforts. I
also encourage Congress to incorporate other strategies to
help stabilize Medicaid costs for states.
Delaying the scheduled phase-out of Medicaid managed care
provider taxes pending enactment of new Medicaid rates,
reimbursement for Medicaid claims owed to states associated
with the federal government's improper classification of
certain permanent disability cases, and federal support for
legal immigrant Medicaid costs are examples of federal
efforts that could provide more stability to state Medicaid
programs. Moreover, given the fiscal crisis that many states,
including California, are experiencing, I strongly urge
Congress to extend the temporary increase in the federal
matching ratio to preserve the ability of state Medicaid
programs to continue to provide essential services to low-
income residents pending full implementation of national
health reform.
Prevention, Wellness and Health Quality Prevention
Wellness and health promotion, along with chronic disease
management, can help to lower the cost curve over the long
run and improve health outcomes in the near term. This was
one of the cornerstone pieces of my health care reform
proposal in California, and I continue to believe it should
be a key piece of the federal efforts. Prevention, wellness
and chronic disease management programs should include both
the individual and wider population levels.
At the individual level, proposals to provide refunds or
other incentives to Medicare, Medicaid and private plan
enrollees who successfully complete behavior modification
programs, such as smoking cessation or weight loss, are
critical reforms. To ensure they are widely used, individual
prevention and wellness benefits should not be subject to
beneficiary cost sharing.
Because individuals' behaviors are influenced by their
environments, health reform must place a high priority on
promoting healthy communities that make it easier for people
to make healthy choices. California has demonstrated through
its nationally recognized tobacco control efforts that
population-based strategies can be effective and dramatically
change the way the people think and act about unhealthy
behaviors, such as tobacco use. A similar model, community
transformation grants, has been advanced in the Senate
Committee on Health, Education, Labor, and Pension
legislation, and it should be included to support policy,
environmental, programmatic and infrastructure changes that
address chronic disease risk factors, promote healthy living
and decrease health disparities.
Quality improvement measures are also critical to health
reform. The House proposal for a Center for Quality
Improvement to improve patient safety, reduce healthcare-
associated infections and improve patient outcomes and
satisfaction is a positive step. Coordinated chronic disease
management is necessary to improve outcomes for chronically
ill people.
Systematic use of health information technology and health
information exchange, including access for public health
agencies, is vital to providing the necessary tools to
measure the success of quality improvement efforts. Finally,
investments in core public health infrastructure can be
facilitated through the creation of the proposed Prevention
and Wellness Trust.
Coverage for All
Coverage for all is also an essential element of health
care reform and I believe an enforceable and effective
individual mandate, combined with guaranteed issuance of
insurance, is the best way to accomplish this goal. The
individual mandate must provide effective incentives to help
prevent adverse selection that could occur if the mandate is
too weak. Creating transparent and user-friendly health
insurance exchanges to help consumers compare insurance
options will also help facilitate participation. States
should maintain a strong role in regulating the insurance
market and have the ability to maintain and operate their own
exchanges, with the understanding that some national
standards will need to be established. California has a long
history of protecting consumers through our two separate
insurance regulators, one covering health maintenance
organizations and the other monitoring all other insurance
products. Maintaining a strong regulatory role at the state
level is in the best interest of consumers, and I urge
Congress to maintain this longstanding and effective
relationship as you design these new market structures.
I hope our experience in California working toward
comprehensive health care reform has informed the debate in
Washington. There will be many short-term triumphs and
seemingly insurmountable roadblocks for Congress and the
nation on the road to comprehensive health care reform. We
must all remain focused on the goal of fixing our health care
system and remember that we all have something to gain from
the reforms, and we all have a shared responsibility to
achieve them. I look forward to working with you as you move
forward on this desperately needed legislation.
Sincerely,
Arnold Schwarzenegger,
Governor, California.