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Voinovich warns Medicaid will be costly to states in health reform bill

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By U.S. Sen. GEORGE VOINOVICH

Mr. President, I have been coming to the floor to remind my colleagues and the American people about the fiscal realities that face our Nation and explain how this so-called health reform legislation would make our fiscal situation worse and our economy suffer even further.

I have been here before to highlight how this health care bill is chock-full of budget gimmicks to hide its true, unmanageable cost.

As a former governor of Ohio, former chairman of the National Governors Association and past chairman of the National League of Cities, one gimmick I am particularly concerned with is the one that puts 14 million additional individuals into the Medicaid program and then asks the states to pick up a portion of the tab. I am very familiar with what unfunded mandates can do to state and local governments, and want to highlight some of the potential consequences of the Medicaid expansion for my colleagues. 

At a $374 billion cost to federal taxpayers, the health care bill before us would expand Medicaid coverage to all people under 133 percent of the federal poverty level. And because Medicaid costs are shared by the federal and state governments, the states will be on the hook for $25 billion of this expansion in the first 10 years.

To put this $25 billion in perspective, let me spend a minute explaining the current fiscal situation of most states in this country.

Most states, like my state of Ohio, are struggling to make ends meet. According to the National Governors Association, the states are in one of the deepest and longest economic downturns since the Great Depression. In the first two quarters of 2009, state revenues were down 11.7 and 16.6 percent respectively.

At the same time, Medicaid spending, which already makes up, on average, approximately 22 percent of state’s budgets on average, is growing and enrollment in the program is skyrocketing.

In Ohio, for example, where the unemployment rate is hovering around 10.5 percent, about 154,000 Ohioans enrolled in the Medicaid program in the last year alone, an eight percent increase over last year. Medicaid now provides health coverage to nearly two million Ohioans—almost one in five residents.

Recognizing this increased demand, states have had some help from the federal government. Earlier this year, Congress provided $87 billion in federal aid to states in the so-called stimulus bill to help states deal with their Medicaid costs. Yet, this money was not intended to last forever.

As it stands right now, December 2010, states will face a steep budget cliff when the temporary Medicaid payments expire. Facing this reality, governors across the country are already wondering how they will cover the costs of their existing programs. 

Not surprisingly, my state’s current governor Ted Strickland, a Democrat, has told me that if Medicaid is expanded he hopes the federal government will assume most if not all of the cost. In fact, he told the Columbus Dispatch that he has warned officials in Washington that, “with our financial challenges right now, we are not in a position to accept additional Medicaid responsibilities.”

He isn’t the only governor to express those same sentiments. Rather, governors from both parties are expressing concern about another federal mandate.

I ask Mr. President, how can we in good conscience move forward with this bill and the new mandate it places on states? 

How can we force the states to make the difficult choices that we are unwilling or unable to make here in Washington?

Mr. President, I served the people of Ohio as governor for eight years and was forced to cut my budget four times. I had to make countless difficult decisions across the board to be fiscally responsible for the State of Ohio. I understand the demands of soaring health care costs, and as I called the program even then, “the Medicaid Pac-Man” which devoured up to 30 percent of our state budget dollars. The “Pac-Man” as I called it took away funding from primary, secondary and higher education programs, road and bridges, county and local government projects and safety service programs that we wanted to provide for the citizens of Ohio.

With this experience, it was during my time as governor that I became particularly concerned with the cost of federal mandates, and worked tirelessly with state and local groups to help pass the Unfunded Mandates Reform Act. In fact, the first time I ever set foot on the floor of the United States Senate was when the Unfunded Mandates Relief legislation passed. I was in the Rose Garden representing state and local governments when President Clinton signed the legislation into law in 1995.

 After that experience, you can imagine Mr. President, how it pains me to be standing here today debating legislation that provides for the largest single expansion of the Medicaid program in its history and brand new fiscal liability for states at a time when states can least afford it.
 
I have serious concerns that if this bill becomes law and states are required to take on more just as the extra stimulus funds disappear, Congress will be forced to spend tens of billions more to keep the Medicaid safety net from failing completely in the not too distant future.

Providing extra dollars to states is going to become an annual ritual in Congress just like fixing the Medicare physician payment formula is each year, and in all probability, we will just borrow the money to pay for it. 

As a former governor, I urge my colleagues to consider the impact this bill will have on their respective states. I hope each of my colleagues will give careful thought to the potentially devastating effects it could have on each on their state budgets and to consult with their governors on what it will mean to other state priorities.

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