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  • States Cry to Washington: Remove Obamacare's Medicaid Handcuffs

    The big news out of a majority of state capitols is that Obamacare’s Medicaid mandates will exacerbate state budget problems and drive many states to the brink of insolvency.

    Thirty-three Republican governors and governors-elect have signed a letter to the White House and Congress making an emphatic appeal that Obamacare’s Medicaid provisions be repealed.

    Medicaid pays health care and long-term care expenses for certain categories of individuals. Medicaid has many problems, but the central one is that it costs taxpayers nearly $400 billion annually without providing recipients a high quality of care.

    National spending on Medicaid has more than quintupled over the past two decades, and about 16 percent of the population is currently enrolled. A recent study from the University of Virginia found that Medicaid patients have worse surgical outcomes than individuals without insurance. Despite these problems, Obamacare relies heavily on the Medicaid program to reduce the number of individuals without health insurance.

    Obamacare’s Medicaid mandates include a requirement that states maintain current program eligibility along with a required Medicaid expansion that is expected to increase national enrollment by around 20 million. If a state reduces eligibility for Medicaid, it will lose all its federal support for the program, which is at least half of every state’s Medicaid spending. This means a state would lose the federal tax contributions its taxpayers send to Washington that eventually return to the state in the form of Medicaid reimbursement.

    “States are unable to afford the current Medicaid program, yet our hands are tied by the maintenance of effort (MOE) requirements,” the governors wrote. “The effect of the federal requirements is unconscionable; the federal requirements force governors to cut other critical state programs, such as education, in order to fund a ‘one-size-fits-all’ approach to Medicaid. Again, we ask you to lift the MOE requirements so that states may make difficult budget decisions in ways that reflect the needs of their residents.”

    Although the letter was signed by only Republicans, Medicaid is at least as much of a concern in blue states. For example, the new governor of New York, Andrew Cuomo, has proposed cutting $4 billion of projected spending on Medicaid (this savings will be split between the state and the federal government) to help close a $10 billion budget gap.

    How will states reduce Medicaid spending, given that they are prevented from reducing program eligibility? There are two primary options: (1) reduce provider payment rates, and (2) cut program benefits. Almost all states have undertaken these actions over the past several years. Reducing payment rates decreases the number of providers who accept Medicaid recipients. Cuts to Medicaid benefits, which are often more generous than those offered by private insurance, have also occurred. The combination of these cuts will likely reduce quality of care and increase the number of recipients who head to emergency rooms for basic care.

    Of course, states could keep their Medicaid programs in tact and take the scalpel to other budget items, such as education, transportation, or law enforcement, which are also being cut in many states. Or they could dramatically increase state taxes. How do these options sound?

    The one option that should be off the table is a continuance of the federal Medicaid bailout, which was enacted as part of the February 2009 stimulus bill. This provision greatly increased the federal contribution toward state Medicaid spending and disproportionately benefited states with the most bloated programs. The country cannot afford to further increase the national deficit to fund the broken Medicaid entitlement. Instead of throwing more money at Medicaid, policymakers at the federal and state level should grapple with its structural problems.

    Medicaid is desperately in need of reform at the federal and state levels, not expansion. States have different characteristics and priorities and need greater flexibility to tailor the Medicaid program to their own specifications. This is true of states with Republican and Democratic governors. This Congress should seriously consider the immediate budgetary concerns of the states as well as structural reforms that would improve care for beneficiaries and reduce taxpayer burden in the longer term. In fact, states should also demand greater flexibility from the federal government in terms of eligibility, benefits, cost sharing, and overall administration and management.

    Posted in Obamacare [slideshow_deploy]

    11 Responses to States Cry to Washington: Remove Obamacare's Medicaid Handcuffs

    1. LALaw says:

      "In fact, states should also demand greater flexibility from the federal government in terms of eligibility, benefits, cost sharing, and overall administration and management."

      He means states should be able to take away health care from people, like Brewercare in Arizona. This will cause more people to die, plain and simple.

      How about any state can restructure their program if they provide the same minimum coverage and cover at least the same amount of people? That sounds fair – but I've yet to see Heritage or any other conservative "think tank" provide such an alternative to do that. Don't worry though – I'm not holding my breath because I would have passed out a long time ago.

    2. Pingback: Tweets that mention States Cry to Washington: Remove Obamacare’s Medicaid Handcuffs | The Foundry: Conservative Policy News. -- Topsy.com

    3. Pingback: » Financial News Update – 1/11/11 NoisyRoom.net: The Progressive Hunter

    4. Pingback: COACHEP » Blog Archive » News about Obamacare issue #235

    5. Bobbie says:

      LALaw, nobody wants to take anyones health care away. The problem is the government is taking the private sector health care away. The cost has already increased significantly to my family. The government is already taking yet the affordable care act doesn't commence until 2014? We won't be able to afford ours way before then.

      Heritage as well as my family and I support free market solutions where responsibility exists and government in all honesty, oversees? Although it seems in the past many years they've overlooked.

      Heritage provides many solutions that promotes personal freedom and privacy and that's why the handcuffs and many government regulations need to be removed.

    6. Ben says:

      LALaw. The issue is this: There are not sufficient resources available to give maximum technologically possible medical care to everyone that can benefit from them. Attempting to do everything has broken the system.

      Saying "you can do whatever you like as long as you provide at least the same benefits to at least the same people" means only reducing overhead costs. There's a hard upper limit to the efficiency of a program. If you cannot say "we cannot pay for this", then you are roping states to pay for coverage that they canot afford, causing the same problems that we are seeing currently. What are we going to sacrifice in order to pay for infinite medical care for everyone?

      This has been seen for decades in organ replacement groups. There are never enough kidneys or livers available, and the organs must be prioritized by where they can do the most good. Deny a kid a liver due to poor prognosis, and you get a Moltov cocktail through your window. However, if little Johnny gets his new liver and then dies a week later, you have wasted one of the most precious medical resources available for nothing.

    7. W.P.Koch,San LuIs Ob says:


      Congress and the White House should stop wasting the people’s money, “cut as detailed herein” and use savings to improve quality of basic invested entitlements. Preserve the 2010 tax schedule with no inheritance taxes. Congress should improve basic Medicare. Vote opponents to this “out”. Citizens come first.

      It is time the U.S. reduces human rites and police activities for the World by lobbying the United Nations, NATO and Interpol to “take on more”. 800 bases in 63 countries across the world should be reduced. Examples are fewer forces in, Bosnia, Germany, Philippines and Okinawa.

      Starting with Iraq, only train for self reliance. After the surge in Afghanistan repeat above and diminish corruption by requiring accounting practices for aid, substituting minerals mining and food crops for drugs.

      Cut bloated federal bureaucracy and phase in outsourcing. Combine CDC, EPA and FDA. Combine the FAA, NHTSA and Transportation Department. Combine GAO and CBO. Departments should eliminate “must spend all”. Return “unused” yearly budget to the treasury. Cut combined department budgets (other than entitlements) on an average of 10%.

      Eliminate all 32 CZARS Mr. president. Reduce your 469 member staff which makes nearly 39 million per year! Halt first lady $180,000 air force one vacation trips. Stop “$200 million per day” presidential-family foreign trips. Cancel $ 20,000,000 executive order (HB 1388) to relocate key Hamas members to U.S.

      Contribute to only one of: The World Bank or International Monetary Fund or U.S. Agency for International Development.

      Reduce foreign aid bribery. For example, no aid to oil rich -Iraq. $37 billion and increasing with $8.7 billion of development funds not accounted for. Halt $150 million aid to Palestinians.

      Charge bailed companies (TARP) for their huge executive bonuses at taxpayer expense. Government should sell shares to recoup for taxpayer. About $154 billion owed. Forget Fannie Mae and Freddie Mac.

      Congress should reduce “stimulus” expenditures by halting: over budget and vote bribery “earmarks”. Example: Stop “cow burp” study. $13 billion unspent in states. Congress should rescind their 2009 increase and do not pay student loans for their staff. Please- no renting of private or military aircraft. An example was Pelosi’s family of $2.1 million for over 2 years. Congress should set commercial travel cost standards and controls.

      Reduce medical cost by: allowing purchasing anywhere in U.S., “tort reform”, and reducing “red tape”. Provide Medicare aid to local medical groups for expediting billing cost speed, doctor/patient verification and fraud reduction.

      Congress should enforce existing immigration laws. Complete the improved fence. Entitlements or benefits should be for only citizens. Deport criminal “illegals”. Only deportees and workers on Visa Programs qualify for needed medical benefits.

      These actions will improve funding for:” Medicare”, “Medicaid, and “Veteran’s Affairs”. Corporations should be allowed tax reduction incentives for hiring with healthcare plan options.

      Healthcare quality can be at least that for Congress or the Federal Employee Health Benefits Program (FEHBP). Additional benefits are: dental coverage, improved visual coverage, no drug “donut hole”, no pre-existing conditions, no deductibles and co-pays except for extended skilled level nursing.

      Other benefits are aid for unemployment compensation and Social Security with reinstated cost of living increases.

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    10. Lyla Cavanaugh L.A. says:

      Why don't we just get our jobs back from China and stop the global trading one-world insanity? Then and only then will we have enough money for anything. Otherwise, all our programs will be down the dumspter, none of us will be working and we will ALL desperately NEED those very programs!

    11. Pingback: HHS Initiatives Fail to Offer States Meaningful Flexibility | The Conservative Papers

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