U.S. Senate Finance Committee Field Hearing: “Perspectives on Medicaid from Select Governors”

I would like to commend the committee for traveling to Salt Lake City to hear testimony from governors about the huge impact that Medicaid has on their state budgets. States are desperate to find savings to get their budgets in balance. Medicaid spending has nearly doubled over the last decade, and for many it consumes the first or second biggest share of state expenditures, threatening education, public safety, and transportation programs. Decades of expansion of what is now the largest single health program in the country are finally catching up. Former Virginia governor and now-Sen. Mark Warner (D-VA) says, “Long before Social Security goes bankrupt, Medicaid is going to bankrupt all the states.”

Under the Patient Protection and Affordable Care Act (PPACA), as many as 25 million people will be added to Medicaid nationwide. Chief Medicare Actuary Richard S. Foster anticipates that by the end of this decade, 84 million people will be on the program.

Many see Medicaid as the foundation for the government-run health program of the future. But Medicaid is arguably the worst health care program in the country. It is riddled with waste and fraud, and it offers a generous benefits package on paper but pays doctors so little that many can afford to see only a few Medicaid patients, and this relegates patients to long waits in hospital emergency rooms to get even routine care.

Governors have told Washington in every way they can they need flexibility in order to improve the program and better manage Medicaid spending. In January 2011, 33 governors and governors-elect wrote to President Obama and congressional leaders requesting “flexibility and relief” from the “excessive constraints placed on us by healthcare-related federal mandates.”  States say they need to trim their Medicaid rolls now — partly because of the faltering economy and partly because stimulus funding that initially helped many of them pay for the added enrollment has ended.

And, while Health and Human Services Secretary Kathleen Sebelius has responded by sending her agency’s Medicaid experts to the states to help them explore options to trim Medicaid spending, she is still urging states to do everything they can to keep Medicaid enrollment at current levels before the health law’s changes take effect in 2014.

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