Weekly Newsletter: August 10, 2009
Will States Drop their Medicaid Programs?
The past week saw significant developments in the relationship of States—and specifically their Medicaid programs—to Democrats’ health “reform” legislation. On Thursday, Senate Finance Committee Chairman Max Baucus admitted that it would be impossible for Congress to pass legislation expanding coverage through Medicaid without passing some of the costs for that expansion on to the States. This development came on the heels of an agreement with Blue Dog Democrats sitting on the Energy and Commerce Committee, which requires States to pay 10 percent of the proposed Medicaid expansion, beginning in 2015. According to a preliminary Congressional Budget Office (CBO) score of H.R. 3200 as introduced, this provision alone would require States to pay an additional $35.8 billion in matching funds over the next decade.
State frustration over what Tennessee Governor Phil Bredesen—a Democrat—dubbed “the mother of all unfunded mandates” boiled over in a Friday New York Times article chronicling States’ problems in funding their existing Medicaid programs. The piece quoted Washington State Governor Christine Gregoire—also a Democrat—opposing any Medicaid expansion not fully paid for by the federal government. Washington State’s Medicaid director went further about the ramifications of the Democrat proposals being considered:
“I can foresee a situation where states would say ‘I don’t have enough in general funds to put up my share of this new expanded Medicaid program, and I have to get out of the Medicaid program’….That’s what I think the doomsday scenario is here.”
Some Members may not be surprised by the bipartisan opposition to a massive new unfunded mandate on States—one designed to mask the true cost of Democrats’ proposed government takeover of health care. Members may note that one possible solution—premium assistance programs that would allow beneficiaries a voluntary choice of private coverage options, and in so doing save States and the federal government billions of dollars—has yet to receive serious consideration from the majority. Members may believe that these kinds of common-sense solutions, rather than government takeovers funded by tens of billions in unfunded mandates, represent a better way to expand access to affordable, quality health coverage.
Pelosi Abrogates White House Agreement—Will the Blue Dog “Compromise” Be Next?
Also this week, the White House confirmed its participation in an agreement between Senate Democrats and the pharmaceutical industry to contribute “voluntary” savings to finance health care legislation—and then, at the behest of Speaker Pelosi and other House Democrats, promptly switched course. On Thursday, press reports indicated that the Obama Administration had consented to an agreement reached between Finance Committee Chairman Baucus and drug manufacturers that would limit industry cost savings as part of a health care overhaul to $80 billion. However, the next day, Congressional Democrats erupted; a spokesman for Speaker Pelosi indicated her desire “to squeeze more money out of the system, including from the pharmaceutical industry,” and Energy and Commerce Committee Chairman Waxman said that “I think PhRMA should contribute more than PhRMA wants to contribute.” As a result, the White House sought to reassure Democrat lawmakers about the non-existence of an agreement, even as a spokesman “reconfirmed the deal again…suggesting a possible misunderstanding,” as the New York Times reported.
Some Members may not be surprised by these developments, given that the “voluntary” concessions agreed to by various industry groups have in many cases been extracted under public pressure. Moreover, some Members may note comments from Congressional leaders indicating that the pharmaceutical concord may not be the only agreement that the Democrat majority in the House walks away from; in particular, the Associated Press reported the very day an agreement was reached with Blue Dog Democrats that, “senior Congressional aides cast [the agreement] as a temporary accommodation, saying leaders had not committed to support it once the bill advances to the floor of the House in the fall.”