[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]




 
      STRENGTHENING MEDICAID AND PRIORITIZING THE MOST VULNERABLE

=======================================================================

                                HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON HEALTH

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            FEBRUARY 1, 2017

                               __________

                            Serial No. 115-2
                            
                            
                            
                            
 [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]                         
 
 


      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov
                        
                        
                        
                        
                             _________ 

                U.S. GOVERNMENT PUBLISHING OFFICE
                   
 24-766                 WASHINGTON : 2018                              
                        
                        
                        
                        
                    COMMITTEE ON ENERGY AND COMMERCE

                          GREG WALDEN, Oregon
                                 Chairman
JOE BARTON, Texas                    FRANK PALLONE, Jr., New Jersey
  Vice Chairman                        Ranking Member
FRED UPTON, Michigan                 BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois               ANNA G. ESHOO, California
TIM MURPHY, Pennsylvania             ELIOT L. ENGEL, New York
MICHAEL C. BURGESS, Texas            GENE GREEN, Texas
MARSHA BLACKBURN, Tennessee          DIANA DeGETTE, Colorado
STEVE SCALISE, Louisiana             MICHAEL F. DOYLE, Pennsylvania
ROBERT E. LATTA, Ohio                JANICE D. SCHAKOWSKY, Illinois
CATHY McMORRIS RODGERS, Washington   G.K. BUTTERFIELD, North Carolina
GREGG HARPER, Mississippi            DORIS O. MATSUI, California
LEONARD LANCE, New Jersey            KATHY CASTOR, Florida
BRETT GUTHRIE, Kentucky              JOHN P. SARBANES, Maryland
PETE OLSON, Texas                    JERRY McNERNEY, California
DAVID B. McKINLEY, West Virginia     PETER WELCH, Vermont
ADAM KINZINGER, Illinois             BEN RAY LUJAN, New Mexico
H. MORGAN GRIFFITH, Virginia         PAUL TONKO, New York
GUS M. BILIRAKIS, Florida            YVETTE D. CLARKE, New York
BILL JOHNSON, Ohio                   DAVID LOEBSACK, Iowa
BILLY LONG, Missouri                 KURT SCHRADER, Oregon
LARRY BUCSHON, Indiana               JOSEPH P. KENNEDY, III, 
BILL FLORES, Texas                       Massachusetts
SUSAN W. BROOKS, Indiana             TONY CARDENAS, California
MARKWAYNE MULLIN, Oklahoma           RAUL RUIZ, California
RICHARD HUDSON, North Carolina       SCOTT H. PETERS, California
CHRIS COLLINS, New York              DEBBIE DINGELL, Michigan
KEVIN CRAMER, North Dakota
TIM WALBERG, Michigan
MIMI WALTERS, California
RYAN A. COSTELLO, Pennsylvania
EARL L. ``BUDDY'' CARTER, Georgia
                         Subcommittee on Health


                       MICHAEL C. BURGESS, Texas
                                 Chairman
BRETT GUTHRIE, Kentucky              GENE GREEN, Texas
  Vice Chairman                        Ranking Member
JOE BARTON, Texas                    ELIOT L. ENGEL, New York
FRED UPTON, Michigan                 JANICE D. SCHAKOWSKY, Illinois
JOHN SHIMKUS, Illinois               G.K. BUTTERFIELD, North Carolina
TIM MURPHY, Pennsylvania             DORIS O. MATSUI, California
MARSHA BLACKBURN, Tennessee          KATHY CASTOR, Florida
CATHY McMORRIS RODGERS, Washington   JOHN P. SARBANES, Maryland
LEONARD LANCE, New Jersey            BEN RAY LUJAN, New Mexico
H. MORGAN GRIFFITH, Virginia         KURT SCHRADER, Oregon
GUS M. BILIRAKIS, Florida            JOSEPH P. KENNEDY, III, 
BILLY LONG, Missouri                     Massachusetts
LARRY BUCSHON, Indiana               TONY CARDENAS, California
SUSAN W. BROOKS, Indiana             ANNA G. ESHOO, California
MARKWAYNE MULLIN, Oklahoma           DIANA DeGETTE, Colorado
RICHARD HUDSON, North Carolina       FRANK PALLONE, Jr., New Jersey (ex 
CHRIS COLLINS, New York                  officio)
EARL L. ``BUDDY'' CARTER, Georgia
GREG WALDEN, Oregon (ex officio)

  
                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Michael C. Burgess, a Representative in Congress from the 
  State of Texas, opening statement..............................     1
    Prepared statement...........................................     3
Hon. Gene Green, a Representative in Congress from the State of 
  Texas, opening statement.......................................     4
Hon. Greg Walden, a Representative in Congress from the State of 
  Oregon, opening statement......................................     6
    Prepared statement...........................................     8
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................     9

                               Witnesses

Avik S. A. Roy, President, Foundation for Research on Equal 
  Opportunity....................................................    11
    Prepared statement...........................................    14
    Answers to submitted questions \1\...........................   125
John McCarthy, CEO of Upshur Street Consulting...................    27
    Prepared statement...........................................    29
    Answers to submitted questions \2\...........................   127
Judith Solomon, Vice President, Center on Budget and Policy 
  Priorities.....................................................    38
    Prepared statement...........................................    40
    Answers to submitted questions...............................   130

                           Submitted Material

Study entitled, ``The Impact of Medicaid Expansions on 
  Mortality,'' Harvard School of Public Health, December 22, 
  2014, \3\ submitted by Mr. Green...............................    55
Congressional Research Service memorandum, January 30, 2017, \4\ 
  submitted by Mr. Guthrie.......................................    59
Statement of the National Coalition on Health Care, submitted by 
  Ms. Castor.....................................................    93
Statement of the Asian & Pacific Islander American Health Forum, 
  submitted by Ms. Castor........................................    95
Statement of AARP, submitted by Ms. Castor.......................   101
Statement of the Save Medicaid in the Schools Coalition, 
  submitted by Ms. Castor........................................   105
Statement of the Association of American Medical Colleges, 
  submitted by Ms. Castor........................................   109
Statement of Governor Charles D. Baker, Commonwealth of 
  Massachusetts, submitted by Mr. Kennedy........................   112
Statement of 3M, submitted by Mr. Shimkus........................   121

----------
\1\ Mr. Roy did not submit a response to questions for the 
  record.
\2\ Mr. McCarthy did not submit a response to questions for the 
  record.
\3\ The information can be found at: https://docs.house.gov/
  meetings/IF/IF14/20170201/105498/HHRG-115-IF14-20170201-
  SD006.pdf.
\24\ The information can be found at: https://docs.house.gov/
  meetings/IF/IF14/20170201/105498/HHRG-115-IF14-20170201-
  SD003.pdf.


      STRENGTHENING MEDICAID AND PRIORITIZING THE MOST VULNERABLE

                              ----------                              


                      WEDNESDAY, FEBRUARY 1, 2017

                  House of Representatives,
                            Subcommittee on Health,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:00 a.m., in 
room 2123 Rayburn House Office Building, Hon. Michael Burgess 
(chairman of the subcommittee) presiding.
    Present: Representatives Burgess, Guthrie, Barton, Upton, 
Shimkus, Murphy, Blackburn, McMorris Rodgers, Lance, Griffith, 
Bilirakis, Long, Bucshon, Brooks, Mullin, Hudson, Collins, 
Carter, Walden (ex officio), Green, Engel, Schakowsky, 
Butterfield, Matsui, Castor, Sarbanes, Lujan, Schrader, 
Kennedy, Cardenas, Eshoo, DeGette, and Pallone (ex officio).
    Also present: Representatives Flores and Ruiz.
    Staff present: Ray Baum, Staff Director; Mike Bloomquist, 
Deputy Staff Director; Elena Brennan, Legislative Clerk, 
Oversight and Investigation; Karen Christian, General Counsel; 
Jordan Davis, Director of Policy and External Affairs; Paige 
Decker, Executive Assistant and Committee Clerk; Paul Edattel, 
Chief Counsel, Health; Blair Ellis, Digital Coordinator/Press 
Secretary; Caleb Graff, Policy Advisor; Jay Gulshen, 
Legislative Clerk, Health; Zach Hunter, Director of 
Communications; Peter Kielty, Deputy General Counsel; Katie 
McKeough, Press Assistant; James Paluskiewicz, Professional 
Staff, Health; Mark Ratner, Policy Coordinator; Jennifer 
Sherman, Press Secretary; Josh Trent, Deputy Chief Health 
Counsel, Health; Luke Wallwork, Staff Assistant; Jeff Carroll, 
Minority Staff Director; Tiffany Guarascio, Minority Deputy 
Staff Director and Chief Health Advisor; Olivia Pham, Minority 
Health Fellow; Rachel Pryor, Minority Health Policy Advisor; 
Samantha Satchell, Minority Policy Analyst; Andrew Souvall, 
Minority Director of Communications, Outreach and Member 
Services; C.J. Young, Minority Press Secretary.
    Mr. Burgess. My gosh, everything is new up here. I have got 
all kinds of buttons. I can actually silence you, Mr. Green, if 
I need to.
    Mr. Green. Mr. Chairman, you know I don't need a mike.

OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A REPRESENTATIVE 
              IN CONGRESS FROM THE STATE OF TEXAS

    Mr. Burgess. Well, I want to welcome everyone of course 
back to the 2123. It is the best room in the Rayburn Building. 
Welcome you to the first Subcommittee of Health hearing for 
this year. It is likely to be a very active term in the United 
States Congress on health care.
     There are members of the full committee who have asked to 
waive onto this committee for the purposes of this hearing, so 
I will ask unanimous consent for Dr. Ruiz when he gets here, 
but right now I will ask for unanimous consent for Mr. Flores 
to be on this committee. Without objection, so ordered.
    I will recognize myself 5 minutes for the purpose of an 
opening statement. Medicaid, a state and federal partnership 
designed as a safety net for the country's most vulnerable has 
grown at a very rapid rate. Today's Medicaid program is three 
times larger by enrollment and by spending than it was in 1997 
under President Bill Clinton. This safety net program will 
cover up to 98 million people this year and will cost the 
taxpayers more than $600 billion.
    As a physician I have had the privilege of providing health 
care for hundreds of Medicaid patients. I have looked into 
their eyes, I have listened to their concerns, I have held 
their hands, I have delivered their babies, and I know of their 
stories. Now I have the privilege of trying to help many 
patients like this by holding this chair and by working with 
each of you on the subcommittee and the full committee to 
improve and modernize the Medicaid program.
    As we embark on a new Congress together, while I know we 
will have real differences, I hope we can agree on some shared 
goals to improve the Medicaid program to provide access and 
high quality care to those who truly need it. Today we will 
start by examining targeted common sense steps that can be 
taken to cut states' cost and prioritize care for vulnerable 
patients who are awaiting access to Medicaid services.
    One of the bills we will consider addresses an area of 
concern that states have repeatedly requested to Congress that 
they examine. Individuals seeking Medicare coverage for long-
term care must have assets below established thresholds to be 
eligible. Medicaid's treatment of married couples' resources 
has resulted in a loophole that allows the community spouse to 
shield assets by purchasing an annuity that is not counted 
against asset thresholds.
    Representative Mullin has written the Close Annuity 
Loopholes in Medicaid Act to put a stop to this gaming of the 
system. His bill would make half of the income generated from 
an annuity purchased by a community spouse within the 60-month 
look-back period that would count toward the institutionalized 
spouse's financial eligibility.
    Another bill we will consider today originated with the 
state emailing the committee to express a concern. The 
Affordable Care Act required states to use the modified 
adjusted gross income for income calculations for determining 
Medicaid eligibility. Eligibility for Medicaid applicants is 
based on a monthly household income. Irregular income received 
as a lump sum such as a lottery or gambling winning, one-time 
gifts or inheritance is counted as income only in the month 
received. This means that lottery winners have been allowed to 
retain taxpayer-financed Medicaid coverage.
    Representative Upton's bill would close this loophole. This 
bill would require states to consider monetary winnings from 
lotteries as if they were obtained over multiple months for the 
purposes of determining eligibility. This provides a scalable 
approach so individuals with high-dollar winnings are kept off 
the program for an appropriate time.
    Finally, each of these bills we are considering allocate 
some portion of the dollars saved into the Medicaid Improvement 
Fund to be used for the purposes of improving access to care 
for the vulnerable and needy individuals currently on Medicaid 
waiting lists.
    While we will have additional hearings on Medicaid in the 
weeks and months to come, this hearing is focused on narrow 
issues and will cover bills that have been introduced in prior 
congresses. We all agree that it is important to secure care 
and keep our commitment to vulnerable Americans; I hope that we 
can begin by taking these small steps forward to put Medicaid 
spending on a sustainable path.
    I would now like to yield the remaining time to 
Representative Flores to speak about his bill that we will be 
considering today.
    [The statement of Mr. Burgess follows:]

              Prepared statement ofHon. Michael C. Burgess

    The Subcommittee will come to order.
    The Chairman will recognize himself for an opening 
statement.
    Medicaid-a state-federal partnership designed as a safety 
net for the most vulnerable-has grown at a rapid rate. Today's 
Medicaid program is three times larger-by enrollment and 
spending-than it was in 1997 under President Bill Clinton. This 
safety-net program will cover up to 98 million people this 
year, and will cost taxpayers more than $600 billion. \1\
---------------------------------------------------------------------------
    \1\ https://www.cms.gov/Research-Statistics-Data-and-Systems/
Statistics-Trends-and-Reports/NationalHealthExpendData/
NationalHealthAccountsProjected.html.
---------------------------------------------------------------------------
    As a physician, I have had the privilege of actually 
providing health care for hundreds of Medicaid patients. I have 
looked in their eyes, I have listened to their concerns, I have 
held their hands, and I know many of their stories. Now I have 
the privilege of trying to help many patients like this, by 
holding this Chair and by working with each of you to improve 
and modernize the Medicaid program. As we embark on this new 
Congress together, while I know we will have real differences, 
I hope we can agree on our shared goal: to improve the Medicaid 
program to provide access to high-quality care for those who 
truly need it.
    Today we will start by examining targeted, commonsense 
steps that can be taken to cut states' costs, and prioritize 
care for vulnerable patients who are waiting to access Medicaid 
services.
    One of the bills we will consider addresses an area of 
concern states have repeatedly requested Congress examine. 
Individuals seeking Medicaid coverage for long-term care must 
have assets below established thresholds to be eligible. 
Medicaid's treatment of married couples' resources has resulted 
in a loophole that allows the community spouse to shield assets 
by purchasing an annuity that is not counted against current 
asset thresholds. Representative Mullin has authored the Close 
Annuity Loopholes in Medicaid Act, to put a stop to this gaming 
of the system. His bill would make half of the income generated 
from an annuity purchased by a community spouse within the 60-
month lookback period countable towards the institutionalized 
spouse's financial eligibility.
    Another bill we will consider today originated with a State 
emailing the Committee to express a concern. The ACA required 
states to use Modified Adjusted Gross Income (MAGI) for income 
calculations for determining Medicaid eligibility. Under MAGI, 
eligibility for Medicaid applicants is based on monthly 
household income. Irregular income received as a lump sum, such 
as lottery or gambling winnings, one-time gifts, or 
inheritances, is counted as income only in the month received. 
This means that lottery winners are been allowed to retain 
taxpayer-financed Medicaid coverage.
    Representative Upton's bill would close this loophole. This 
bill would require states to consider monetary winnings from 
lotteries as if they were obtained over multiple months for 
purposes of determining eligibility. This provides a scalable 
approach so individuals with high-dollar winnings are kept off 
the program for an appropriate time.
    Finally, each of these bills we are considering allocate 
some portion of the dollars saved in to the Medicaid 
Improvement Fund, to be used for the purpose of improving 
access to care for the vulnerable and needy individuals 
currently on Medicaid waiting lists.
    While we will have additional hearings on Medicaid in the 
weeks and months to come, this hearing is focused on narrow 
issues and will cover bills that have been introduced in prior 
Congresses. We all agree that it is important to secure care 
and keep our commitment to vulnerable Americans. I hope that we 
can begin by taking these small steps forward to put Medicaid 
spending on a sustainable path.
    With that, I'll yield to Representative Flores to speak 
about his bill, which we will be considering today.

    Mr. Flores. Thank you for yielding, Chairman Burgess. 
Chairman Burgess and Ranking Member Green, thank you for having 
me here this morning for this important hearing. I appreciate 
the opportunity to work with you to strengthen Medicaid and 
prioritize health care for our most vulnerable citizens. I also 
want to thank each of our witnesses for being here today. It is 
crucial that we work to identify and prioritize the populations 
that stand to benefit most from reform to our current health 
care system.
    Today a growing number of hardworking Americans are on 
Medicaid enrollment waiting lists in all 50 states. At the same 
time, other populations who do not qualify are enrolling in 
Medicaid and hurting access for our nation's truly vulnerable 
populations. The Verify Eligibility for Coverage Act before us 
this morning addresses this issue. This bill prioritizes our 
neediest Medicaid populations by not forcing states to provide 
coverage for new applicants in Medicaid until those applicants 
have provided satisfactory documentation of lawful presence in 
the United States.
    Again I thank the chairman and ranking member. These 
Medicaid improvement bills before us today are reason for great 
optimism for our most vulnerable populations. Mr. Chairman, I 
yield back.
    Mr. Burgess. The chair thanks the gentleman. The gentleman 
yields back. It is not lost on me that we are meeting today, 
well, of course this is the Dingell Committee Room, but also 
known unofficially as the Green Room. So it is now the chair's 
privilege to recognize the subcommittee ranking member, Mr. 
Green, 5 minutes for an opening statement, please.

   OPENING STATEMENT OF HON. GENE GREEN, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF TEXAS

    Mr. Green. Thank you, Mr. Chairman, and I appreciate that. 
It was my decision but I want to thank the previous chairman 
and the current chairman for leaving the beautiful green walls. 
Thank you, Mr. Chairman, and congratulations on your 
chairmanship. I look forward to continuing to work with you on 
issues. We have done that over the years.
    Medicaid is a lifeline, the safety net for more than 74 
million Americans who depend on it for coverage. One in every 
five Americans receive health coverage from the Medicaid 
including 12 million people who now have health insurance 
thanks to the Affordable Care Act's expansion of Medicaid for 
low-income adults. It is the primary health insurer for ten 
million Americans with disabilities, finances more than half 
the births, and is a main source of long-term care coverage. In 
fact, one in seven seniors on Medicaid and 70 percent of all 
nursing home residents rely on the program.
    Today's hearing is entitled Strengthening Medicaid and 
Prioritizing the Most Vulnerable. Medicaid is both strong and 
protects the vulnerable, and this idea of covering one 
population deemed less vulnerable as done at the expense of 
another more vulnerable population is just wrong both morally 
and factually. Health insurance is a right and coverage and 
benefits are not a zero-sum game.
    The idea of pitting one population or one benefit in a 
program against another is a red herring. It is in a poorly 
disguised plot to limit access/benefits and punish low-income 
Americans by undermining the effectiveness of the program. 
Medicaid is a health care safety net for coverage and this 
notion of one group being more vulnerable and thereby we should 
take money away from the other types of beneficiary goes 
against the intent of the program.
    Medicaid is strong. It provides comprehensive care at a 
lower cost than private insurance. It is true that total 
Medicaid spending has grown significantly, but increased 
coverage has been overwhelmingly the driver. Enrollment growth 
is a cause for celebration not a reason to undermine the 
program. It is baffling that we have a debate on whether a 
person having health insurance is a good thing.
    A part of the enrollment growth is driven by the ACA's 
Medicaid expansion which has helped drive the uninsured rate to 
8.6 percent, the lowest in our history. States that expanded 
Medicaid have not only increased, seen increase in health 
coverage, but has also seen savings in their health budgets. 
Medicaid beneficiaries, those under a hundred percent of the 
federal poverty level and the expansion population which fall 
between 100 and 135 percent of federal poverty level, are not 
fat cats draining the system. For the overwhelming majority of 
them private insurance is not an option financially and 
Medicaid allows them to work more hours and care for their 
families and seek higher paying jobs.
    More than 550,000 of my constituents fall into the Medicaid 
expansion gap because Texas refused to almost a $100 billion in 
federal money over a decade left them without an option. The 
idea that being uninsured is somehow better than having 
Medicaid flies in the face of simple logic. Being uninsured is 
a terrible situation. One illness can mean bankruptcy and the 
only point of access to care is through the emergency room.
    But even if that doesn't persuade you, having a large 
number of uninsured population is bad for everyone, for folks 
with coverage through their employers by driving up premiums, 
physicians and hospitals and state budgets. I hear from 
constituents every day about how coverage has literally saved 
their life and would hear from more in Texas if it would stop 
engaging in legislative malpractice and act in the state's best 
interest.
    Last Congress and the congresses before we worked together 
on meaningful strengthening of Medicaid, expanding benefits, 
shoring up program integrity, and streamlining the program. The 
proposal before us today score a savings because they will 
delay or deny coverage to some or redirect funds to states that 
choose to operate waiting lists for Medicaid home and community 
based services.
    The idea that states have waiting lists because resources 
had to be diverted to expand Medicaid doesn't hold water. It is 
absolutely no correlation between states' coverage levels and 
waiting lists for home and community based services. Texas has 
the biggest waiting list in the country but didn't expand 
Medicaid, while 12 of the states that did expand operate no 
waiting lists for these services of any kind.
    The right way to truly strengthen Medicaid for the future 
is to build on the ACA with expanded coverage, promoting 
program integrity and transparency and advanced delivery system 
reform in the program. I think every member of our committee is 
a problem solver. If we have a problem we want to deal with it. 
I am glad to work with anyone to solve problems, but we will 
fight with all our means to save the safety net of our low-
income and oldest and youngest Americans.
    I thank you, Mr. Chairman, and I yield back my time.
    Mr. Burgess. The chair thanks the gentleman. The gentleman 
yields back. The chair would ask unanimous consent that Dr. 
Ruiz be waived onto the subcommittee for the purpose of this 
hearing. Without objection, so ordered.
    The chair now recognizes the chairman of the full 
committee, Mr. Walden, 5 minutes for an opening statement, 
please.

  OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF OREGON

    Mr. Walden. Well, Mr. Chairman, thank you. And before the 
clock starts I just want to commend former Chairman Upton, I 
guess, on the color choice. And Mr. Green, I know that makes 
you happy. I hope what comes up next makes everyone happy 
because we have this new--we have new electronics. Oh, look at 
that, the University of Oregon. That will now be a permanent 
feature since I thought it actually went with the green. Are 
you OK with that?
    I would like to yield to the gentleman from Clackamas 
County. Is that all right, Kurt? I can't get an orange one.
    Mr. Schrader. Yes. No, I think this is a good example of 
how this committee is very bipartisan, sir.
    Mr. Walden. That is right. All right, thank you very much, 
Mr. Chairman. Thanks for your leadership. This does mark the 
first hearing of the Health Subcommittee in this new Congress 
with a physician heading the subcommittee and with other 
professional physical and mental health care providers in key 
roles. Let there be no mistaking our intention. We will 
modernize America's health care laws by putting what is best 
for the patient as our top priority.
    The days of putting overbearing, unaccountable Washington 
bureaucrats and their tens of thousands of pages of regulations 
first are over. Today we embark afresh on our efforts to 
strengthen, improve, and modernize America's Medicaid program. 
We share a common goal of making sure that those most in need 
of medical services in our communities get better quality 
affordable care. That is our shared goal.
    We are committed to protecting patients and to supporting 
innovative patient-centered solutions at the state and local 
levels. We recognize the Medicaid program is critically 
important. It is a safety net for millions of Americans, 
Americans who are elderly, Americans who are low-income, or 
Americans who are blind or have disabilities. Individuals and 
families served by Medicaid are not just program enrollees, 
they are our neighbors. They are our friends.
    Today we begin our work to modernize Medicaid and we turn 
to experts who have researched creative strategies to give us 
guidance on what is working and what is not. We should view our 
states as partners in a common cause to bring about a fresh 
approach to a big government program that began a half a 
century ago or more when Washington bureaucrats thought they 
knew what was best.
    I want to commend our Health Subcommittee who worked hard 
last Congress to identify and adopt measures which would 
improve access to care for patients, empower states with more 
flexibility and tools, and yield better care for patients, but 
no, that was just scratching the surface. Our talented and 
experienced witnesses today offer us a set of new ideas and 
they offer us their counsel and how we can improve our own 
members' bills. Thank you for your input.
    You can sense an eagerness among governors whom I have met 
with, and state Medicaid directors and think tanks who for the 
first time in a long time realize they actually have a partner 
who is serious about hearing from them and working with them to 
transform the most expensive health care system in the world 
into the most modern patient-centered, outcome-based model 
known around the globe. That is our opportunity here. They are 
overflowing with better ways to deliver health care to our most 
needy citizens.
    I have read all of your testimony, it is terrific, and I 
hope you have only just begun to give those ideas to us. We 
have an obligation to improve Medicaid. We can make it more 
than just our country's safety net that catches people when 
they are down and out. We can do better than that. We can 
empower states to innovate, to harness savings and enhance the 
actual health of the patients who have been waiting years for a 
Washington bureaucrat to decide to throw the kill switch on 
every new idea.
    The legislation we will consider today originates from our 
members listening to their constituents and state leaders back 
home who believe we have not done enough to root out waste, 
fraud, and abuse. Our committee was reminded of that yesterday 
in the Oversight subcommittee chaired by Mr. Murphy where we 
heard from the GAO and the HHS Office of Inspector General that 
for 14 years Medicaid has remained on the list of high-risk 
programs and that those tasked with identifying and preventing 
waste, fraud and abuse are still frustrated in their jobs 
because they cannot get the data, and the program's lack of 
transparency.
    Prioritizing the most vulnerable and those in need 
necessarily requires setting priorities, so today we consider 
three proposals which make common sense changes to close 
loopholes, root out abuses and target savings to help patients 
most in need. A portion of those savings from each of these 
reforms would go to help individuals on Medicaid waiting lists 
for home and community based services.
    These bills improve Medicaid. They help patients by 
scrapping outdated rules or correcting unintended consequences 
from existing federal policy. Consider this just the start of 
our work as we identify other red tape and outdated 
requirements that add costs and deny care to those truly in 
need. So in the months and weeks ahead we look forward to 
hearing from you and others in our work because we want to give 
states more choices, more tools, more flexibility, all toward 
the goal of improving health care choices and affordability for 
patients.
    With that I would yield to Markwayne Mullin the remainder 
of my time.
    [The statement of Mr. Walden follows:]

                 Prepared statement of Hon. Greg Walden

    This marks the first hearing of the Health Subcommittee in 
the new Congress. With a physician heading this subcommittee 
and with other professional physical and mental health care 
providers in key roles, let there be no mistaking our 
intention: We will modernize America's health care laws by 
putting what's best for the patient as our top priority.
    The days of putting overbearing, unaccountable Washington 
bureaucrats and their tens of thousands of pages of regulations 
first.are over.
    Today, we embark afresh in our efforts to strengthen, 
improve, and modernize America's Medicaid program. We share a 
common goal of making sure that those most in need in need of 
medical services in our communities get better quality, 
affordable care. We are committed to protecting patients and to 
supporting innovative, patient-centered solutions at the state 
and local levels.
    We recognize the Medicaid program is a critically important 
safety net for millions of Americans--Americans who are 
elderly, low-income, or Americans who are blind or have 
disabilities. Individuals and families served by Medicaid are 
not just program enrollees, they are our neighbors, and our 
friends.
    Today we begin our work to modernize Medicaid. And we turn 
to experts who have researched creative strategies to give us 
guidance on what's working and what's not. We should view our 
states as partners in a common cause to bring a fresh approach 
to a big-government program begun a half-century ago when 
Washington bureaucrats thought they knew what was best.
    I want to commend our Health Subcommittee who worked hard 
last Congress to identify and adopt measures which would 
improve access to care for patients, empower states with more 
flexibility and tools, and yield better care for patients, but 
know that was just scratching the surface.
    Our talented and experienced witnesses today offer us a new 
set of ideas, and counsel on how we can improve our own 
members' bills. Thank you for your input.
    You can sense an eagerness among governors and state 
Medicaid directors and think tanks who for the first time in a 
long time realize they have a partner who is serious about 
hearing from them and working with them to transform the most 
expensive health care system in the world into the most modern, 
patient-centered, outcome-based model known around the globe. 
They are overflowing with better ways to deliver health care to 
our most needy citizens. And I hope we've only just begun to 
hear from them.
    We have an obligation to improve Medicaid. We can make it 
more than just our country's safety net that catches people 
when they are down and out. We can empower states to innovate, 
to harness savings and enhance the actual health of the 
patients without having to wait years for a Washington 
bureaucrat to decide to throw the kill switch on a new idea.
    The legislation we will consider today originates from our 
members listening to their constituents and state leaders back 
home who believe we have not done enough to root out waste, 
fraud and abuse. Our committee was reminded yesterday in the 
Oversight Subcommittee hearing by the GAO and the HHS Office of 
Inspector General that for 14 years Medicaid has remained on 
the list of ``high risk'' programs and that those tasked with 
identifying and preventing waste, fraud and abuse are 
frustrated in their jobs by a lack of data and transparency.
    Prioritizing the most vulnerable and those in need 
necessarily requires setting priorities. So, today we consider 
three proposals which make common-sense changes to close 
loopholes, root out abuses and target savings to help patients 
most in need. A portion of the savings from each of the reforms 
would to help individuals on Medicaid waiting lists for Home 
and Community Based Services.
    These bills improve Medicaid and help patients by scrapping 
outdated rules or correcting unintended consequences from 
existing federal policies. Consider this just the start of our 
work to identify red-tape and outdated requirements which add 
costs and deny care to those truly in need.
    In the weeks and months to come, we will actively work 
modernize Medicaid by giving our states more choices, more 
tools, more flexibility-all toward the goal of improving the 
health care choices and affordability for patients.

    Mr. Mullin. Thank you, Mr. Chairman. It is an honor to sit 
on the Health Subcommittee and I am looking forward to 
reforming health care with my colleagues in Congress. Our 
Medicaid system is in drastic need to reform. In my bill, Close 
the Annuity Loopholes in Medicaid, or the CALM Act, closes an 
obvious loophole. The CALM Act makes sure that individuals with 
significant means do not take advantage of Medicaid by hiding 
some of their assets.
    Currently, some married couples are allowed to mask their 
assets by purchasing an annuity that pays out to their spouse. 
This also allows a couple to hide their true net worth when 
applying for Medicaid coverage. My bill closes the loophole and 
directs the savings to help those who are waiting for home and 
community based services. It is an easy loophole to close and I 
look forward to passing this with other Medicaid reform 
legislation to make Medicaid stronger. Thank you, Mr. Chairman, 
and I yield back.
    Mr. Burgess. The chair thanks the gentleman and the 
gentleman yields back. The chair now recognizes the ranking 
member of the full committee, Mr. Pallone, 5 minutes for an 
opening statement, please.

OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE 
            IN CONGRESS FROM THE STATE OF NEW JERSEY

    Mr. Pallone. Thank you, Mr. Chairman. Since 1965, the 
Medicaid program has been an invaluable resource to poor 
families, pregnant women, children, seniors, and now thanks to 
the Affordable Care Act low-income working adults. It is also 
the program that individuals with disabilities depend on to 
maintain independence in the community. In 2016, over 97 
million Americans depended on Medicaid at some point during the 
year. Together, Medicaid and CHIP cover one in three children 
in this country and nearly half of all births. It is undeniable 
that Medicaid coverage pays us back as a society tenfold and 
that is why improving and strengthening Medicaid for 
generations to come continues to be one of our primary goals.
    Last Congress this committee worked together on targeted 
policies that generally strengthen and improve the Medicaid 
program for beneficiaries. Unfortunately the bills before us 
today do not share these priorities. In fact, one piece of 
legislation continues the Trump administration's assault 
against our legal permanent resident population and naturalized 
citizens.
    The Republican strategy to strengthen Medicaid is to remove 
or exclude certain people from the program and then apply those 
resources to another person and this is a meaningless approach 
to resource management. There is no evidence to suggest that 
some beneficiaries take away resources from others or that 
excluding some beneficiaries will benefit others.
    In today's hearing we will discuss three bills that are 
based on this very falsehood, bills that target specific 
beneficiaries for exclusion, bills that ultimately incentivize 
and reward those states that choose to operate waiting lists 
for home and community based services. In order to truly 
strengthen the Medicaid program we should expand coverage, 
protect against fraud and implement advanced delivery system 
reform, and the Affordable Care Act did just that. Thanks to 
the Affordable Care Act, 31 states and the District of Columbia 
have adopted expansion and dramatically lowered the uninsured 
rate.
    All 50 states are testing innovative models of care and 
Medicaid eligibility and data collection systems have been 
modernized. Medicaid has always been under attack by 
Republicans, but the threat to this program and to its 
beneficiaries is more dangerous than ever before. Republican 
policies to cap or turn the program into a block grant would 
result in the rug being pulled out from under millions of 
children, elderly, individuals with disabilities, and low-
income working adults.
    These policies are nothing but bad for our providers and 
our state economics. In fact, one analysis by the Kaiser Family 
Foundation found that block-granting Medicaid would lead states 
to drop between 14.3 million and 20.5 million people from 
Medicaid, an enrollment decline of 25 to 35 percent, and would 
lead states to cut provider reimbursements by more than 30 
percent.
    Now I know my Republican colleagues keep saying they have a 
plan and that Americans will not lose their health coverage. 
But I think it is clear today that the Republicans' only game 
plan right now is to sabotage health coverage for tens of 
millions of Americans. I yield the remaining time to Mr. Lujan 
from New Mexico.
    Mr. Lujan. Thank you, Mr. Pallone. Hypocrisy isn't a term 
that I use lightly. Unfortunately today hypocrisy is the word 
that readily comes to mind. Let's start with the Republican 
title of this hearing: Strengthening Medicaid and Prioritizing 
the Most Vulnerable. Actions speak louder than words. Let's 
talk about what this hearing is really all about. My Republican 
colleagues are holding this hearing to lay the groundwork for 
ripping health insurance from millions of Americans.
    Now I believe that access to affordable and quality health 
care is a right for all, not a privilege for some. We would be 
never be having a conversation like this if the topic wasn't 
Medicaid. If we were having a hearing on Medicare we would be 
talking about real ways to better serve beneficiaries, yet when 
it comes to health care for working families struggling to make 
ends meet, mainly those on Medicaid, all my Republican friends 
do is talk about how to cut-cut-cut and strip away access to 
care from millions of Americans.
    Gutting Medicaid would be a disaster for 74 million 
Americans including nearly a million New Mexicans. Why would 
anyone want a less healthy country? And just listen to the 
argument my Republican colleagues are making, fewer people 
having health insurance and access to care is good for America. 
It is bad for America, a country with fewer health care jobs 
and a country with more working class families that could lose 
everything because of a health emergency like a car accident or 
a cancer diagnosis.
    I have to believe this comes down to the fact that the 
leaders of the Grand Old Party don't think that some people are 
grand enough to deserve health care. That is wrong. And that is 
why the cloud of hypocrisy hangs over these discussions today 
and every day that we continue to discuss Medicaid solely 
through the lens of what Republicans can cut and how we can 
improve things for those millions of seniors and working 
families served by this program. With that I yield back.
    Mr. Burgess. The gentleman yields back. The chair thanks 
the gentleman. This concludes member opening statements. The 
chair would remind members that pursuant to committee rules, 
all members' opening statements will be made part of the 
record.
    And we do want to thank our witnesses for being here this 
morning taking of your time to testify before the subcommittee. 
Each witness will have the opportunity to give an opening 
statement and this will be followed by a round of questions 
from members. Our witnesses this morning are Dr. Avik Roy, the 
president of the Foundation for Research on Equal Opportunity; 
Mr. John McCarthy, the former director of the Ohio Department 
of Medicaid and the former deputy director of the DC Department 
of Health Care Finance; and Ms. Judith Solomon, vice president 
for health policy at the Center on Budget and Policy 
Priorities.
    We do appreciate each of you being here today. We will 
begin the panel with Dr. Roy, and you are recognized for 5 
minutes for the purpose of summarizing your opening statement, 
please.

    STATEMENTS OF AVIK S. A. ROY, PRESIDENT, FOUNDATION FOR 
  RESEARCH ON EQUAL OPPORTUNITY; JOHN MCCARTHY, CEO OF UPSHUR 
 STREET CONSULTING; AND JUDITH SOLOMON, VICE PRESIDENT, CENTER 
                ON BUDGET AND POLICY PRIORITIES

                  STATEMENT OF AVIK S. A. ROY

    Mr. Roy. Thank you, Mr. Chairman, Chairman Burgess and 
Chairman Walden, Ranking Member Green, members of the Health 
Subcommittee of the Energy and Commerce Committee. Thanks for 
inviting me here today for your premier hearing as chairman.
    My name is Avik Roy. I am the president of the Foundation 
for Research on Equal Opportunity, a nonpartisan, nonprofit 
think tank focused on expanding economic opportunity to those 
who least have it. In my remarks I will discuss Medicaid's poor 
health outcomes. I will describe why the program's outdated 
design is directly responsible for those outcomes and I will 
explore some avenues for reform.
    Studies consistently show that patients on Medicaid have 
the worst health outcomes of any insurance program in America, 
far worse than those with private insurance and, strikingly, no 
better than those with no insurance at all. It seems 
inconceivable that we could spend $450 billion a year on 
Medicaid without any improvement in health outcomes on average, 
but the evidence is overwhelming and it is detailed in my 
written testimony.
    Why do patients fare so poorly on Medicaid? The key reason 
is that Medicaid pays physicians far below market rates to care 
for Medicaid beneficiaries. In 2008, according to CMS, Medicaid 
paid physicians approximately 58 percent of what private 
insurers pay them for comparable services. These disparities 
have only increased over the ensuing decade. Surprisingly, a 
2007 study by MIT economists Jonathan Gruber and David 
Rodriguez found that doctors fare even better treating the 
uninsured, economically, than they do caring for those on 
Medicaid because getting paid in cash by the uninsured is 
better than getting paid through Medicaid.
    As a result of these disparities in reimbursement, fewer 
physicians accept Medicaid enrolled patients. Internists are 
8.5 times as likely to refuse to accept any Medicaid patients 
relative to those with private insurance. Physicians are six 
times more likely to deny an appointment to children on 
Medicaid suffering from serious medical conditions like a 
broken arm or an acute asthma attack relative to those with 
private insurance. Without consistent access to physicians, 
Medicaid enrollees don't get their cancer diagnosed until it is 
too late, they don't receive adequate care for problems like 
diabetes and heart disease until it is too late.
    So why is it that Medicaid's reimbursement rates are so 
low? It is because of the flawed way in which the program was 
designed in 1965. Medicaid as you know is jointly funded by 
state governments and the federal government, but because 
neither states nor Washington have full responsibility for the 
program both parties have engaged in irresponsible behavior.
    As Medicaid has grown over time, state budgets have come 
under increasing strain. States' Medicaid obligations now crowd 
out spending on teachers, police and roads. But it is mostly 
illegal for states to increase co-pays, deductibles or premiums 
for Medicaid enrollees. Moving people off of the Medicaid rolls 
is highly controversial, and most attempts by state governments 
to enact minor programmatic changes must survive as you know 
this lengthy waiver process with HHS.
    Federal law in some cases forces states to spend Medicaid 
dollars on people who don't need the help. For example, lottery 
winners who receive a lump sum payment in 1 month but have zero 
income for the rest of the year are eligible for Medicaid 11 
months out of 12. Individuals whose spouses receive large 
annuities remain eligible in some cases for the Medicaid long-
term care program.
    Federal law also requires states to provide Medicaid funds 
to new enrollees for a period of time even if they have not 
documented that they legally reside in the U.S. and are 
therefore eligible for such funds. These provisions put 
additional pressure on states to reduce Medicaid spending and 
reimbursement rates for the vulnerable populations that the 
program was designed to help. The vast majority of states have 
responded to these constraints in exactly that way by reducing 
Medicaid's reimbursement rates to health care providers, paying 
hospitals and doctors less for the same level of service.
     The Health Subcommittee is considering legislation that 
would address some of these problems and I look forward to 
exploring those ideas with you at this hearing. I know that 
many of you believe as I do that we can do much more to improve 
the quality of care and coverage for Americans below the 
poverty line.
    At the Foundation for Research on Equal Opportunity, we 
have published a detailed and wide-ranging health reform 
proposal called Transcending Obamacare: A Patient-Centered Plan 
for Near-Universal Coverage and Permanent Fiscal Solvency. We 
estimate that the plan would cover 12 million more people than 
current law, dramatically improve health outcomes for the poor 
by taking the dollars we spend on acute care Medicaid and 
giving them to patients in the form of refundable tax credits 
that can be used to purchase private coverage and build Health 
Savings Accounts.
    Per capita caps, a reform contemplated by this 
subcommittee, can also be structured in a similar way. Aside 
from the fact that private coverage is superior to Medicaid 
coverage, integrating Medicaid enrollees into an individual 
health insurance coverage will ensure that as their incomes go 
up and down they can remain in one insurance plan in one 
physician network and thereby gain a continuity of care that 
they do not have in today's system.
    This Congress has a once-in-a-generation opportunity to 
transform the quality of coverage and care that we offer to the 
neediest amongst us. I look forward to your questions and to 
being of further assistance to this committee. Thank you.
    [The statement of Avik S. A. Roy follows:]
    
    
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    Mr. Burgess. The chair thanks the gentleman and the chair 
recognizes Mr. McCarthy 5 minutes for your opening statement, 
please.

                   STATEMENT OF JOHN MCCARTHY

    Mr. McCarthy. Good morning, Chairman Burgess, Ranking 
Member Green and distinguished members of the subcommittee. I 
am John McCarthy, currently the CEO of Upshur Street 
Consulting. I recently stepped down from the position of 
Medicaid director for the State of Ohio and previous to that 
was the Medicaid director for the District of Columbia. I 
appreciate this opportunity to share my recommendations for 
strengthening the Medicaid program.
    The three bills that are up for discussion began to address 
some common sense reforms to eligibility requirements for the 
Medicaid program. Having recently served as the vice president 
on the board of directors for the National Association of 
Medicaid Directors, I know that it is important to Medicaid 
directors that the integrity of the program is maintained to 
make the program financially viable to serve those who qualify. 
These three bills promise to move the program in that 
direction.
    First, the discussion draft of Prioritizing the Most 
Vulnerable Over Lottery Winners Act of 2017 would place 
reasonable exclusion periods for Medicaid eligibility when a 
person wins the lottery. Limiting Medicaid eligibility for 
lottery winners is an eligibility change that many support and 
a policy change I advocated for the last few years.
    Second, the discussion draft of the Close Annuity Loopholes 
in Medicaid Act requires a state to apply half of an annuity's 
payout to the spouse that is not institutionalized to the 
income of the spouse that is institutionalized and applying for 
Medicaid. Ensuring that Medicaid eligibility is limited to 
people without resources to pay for long-term services and 
supports, or LTSS, instead of also covering those who can 
shelter their resources would be an important improvement.
    For most states the greatest spending per person is for the 
aged, blind, and disabled population who are the greatest users 
of LTSS, so this is an important area to carefully explore. 
However, the bill does have some technical issues that need 
further examination. For example, the institutionalized spouse 
could purchase the annuity and then name the spouse the 
annuitant and avoid assigning half of the payment to the 
institutionalized spouse. Because this area of Medicaid policy 
is so complex, a very close analysis of this issue is needed to 
ensure the problem is fully addressed.
    Lastly, the Verify Eligibility for Coverage Act eliminates 
federal dollars being used on services before a person proves 
their citizenship or immigration status. This change would 
provide the person requesting eligibility with an incentive to 
produce documentation as quickly as possible and help to ensure 
federal dollars are not spent on individuals who do not qualify 
for the program.
    All the bills include the creation of the Medicaid 
Improvement Fund. The main stated goal of this fund is to 
reduce waiting lists for home and community-based service 
waivers. I agree that this is an important issue. It was one of 
the goals of the first Kasich administration budget to 
eliminate the wait list for the PASSPORT waiver which serves 
people over the age of 60.
    We eliminated that wait list and reduced the number of 
nursing home bed-days that were paid for which in turn led to 
over $1 billion in savings over 4 fiscal years. A small initial 
investment was needed, but in the long term this offered a cost 
savings. However, this cost savings is only realized for cases 
in which there is a diversion from an institution.
    If the person who is on the wait list is never 
institutionalized, the Medicaid program is likely to have lower 
expenditures than HCBS would entail. That does not necessarily 
mean that the person does not have the care he or she needs, 
the person may be enrolled in the Medicaid program and 
receiving some amount of state plan services at home and 
additional services may be provided by non-paid caregivers or 
from services paid by local dollars. This program therefore 
will need to be carefully managed so that costs do not grow 
uncontrollably. In particular, in caution I offer that since 
this bill creates a competitive program with priority given to 
states with the highest number of people on wait lists that 
provides an incentive to a state to have higher wait lists.
    Other methods for determining the appropriate funding level 
per state should be explored in order to manage the cost of the 
change. One alternative may be to tie the proposal to the Money 
Follows the Person program and provide financial incentive to 
states to move people out of institutions and back into the 
community. Another option may be to have the dollars proposed--
the Medicare program needs reform. There is simply too much 
unneeded and overly burdensome regulation that has been 
promulgated over the last few years and that does not provide a 
benefit to beneficiaries.
    The new Access to Care Regulation and the Managed Care Mega 
Rule are just two examples. The Access to Care Regulation was a 
backdoor method to take away the ability for a state to set 
reimbursement rates for providers by putting that authority in 
the Centers for Medicare and Medicaid Services' hands. The 
amount of information that is requested by CMS, such as surveys 
of providers and private sector rate data, is not a true 
measure of adequacy of the proposal. Additionally, the staff 
time needed to complete this work pulls the staff away from 
more impactful tasks such as implementing value-based 
purchasing.
    The areas in need of reform that I have laid out above are 
only a subset of issues that are currently not working 
optimally in the Medicaid program. I do not have enough time 
today to go through all the areas. A good resource to use on 
what reforms are needed is the document published by NAMD, the 
National Association of Medicaid Directors legislative 
priorities for 2017. However, for real reform the fundamental 
role of CMS must be rethought. Currently it acts as a regulator 
for states. It should shift into the role of a payer and 
oversee the program. Instead of telling a state how much a 
state should reimburse providers, CMS should monitor health 
outcomes.
    With that, in conclusion, the Medicaid program is in need 
of reform. We need to think of new ways to oversee this 
program, and I am happy to answer any questions.
    [The statement of John McCarthy follows:]
    
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    Mr. Burgess. The chair thanks the gentleman and the 
gentleman yields back. Ms. Solomon, you are recognized for 5 
minutes for the purpose of an opening statement.

                  STATEMENT OF JUDITH SOLOMON

    Ms. Solomon. Thank you, Chairman Burgess, Ranking Member 
Green, and members of the subcommittee. I am really happy to be 
here to testify today. I am Judith Solomon, vice president for 
health policy at the Center on Budget and Policy Priorities. I 
am going to cover three things in my statement, provide some 
background on home and community-based service waivers which I 
will refer to as HCBS, talk about how they work, explain why 
there are waiting lists, and briefly discuss how waiting lists 
should and should not be addressed.
    HCBS waivers became available in Medicaid in 1981 to give 
states a way to provide long-term care in people's homes. Up 
until then because skilled nursing care and home health have 
been mandatory services in Medicaid there was a bias toward 
institutional care. Families often had to face the dilemma that 
the only way they could get their loved ones the care they 
needed was to put them in a nursing home.
    HCBS waivers gave states new ways to address the needs of 
children, adults with disabilities, and seniors. States can 
make people eligible for Medicaid who would only be eligible in 
a nursing home and create packages of services specifically 
designed to allow them to stay at home. These include home 
modifications, respite care, and enhanced home health services. 
Progress has been dramatic. In 2013, for the first time over 
half of long-term services and supports were for HCBS rather 
than for institutional care, and Figure 1 in my testimony shows 
that trajectory.
    So why are there waiting lists? Well, HCBS waivers are the 
epitome of flexibility in Medicaid. States can target waivers 
to people with intellectual and developmental disabilities, 
seniors, people with HIV/AIDS and people with traumatic brain 
injury, and they can create packages of services that are 
specifically designed for the group they select. According to 
CMS there are now over 275 waiver programs nationally serving 
well over a million people.
    Part of the flexibility states have is to limit their 
waivers to a defined number of slots and create waiting lists. 
The flexibility was important to states when these waivers were 
created because the waivers are expensive and states were 
concerned that the demand would just put them in the red. So 
the number of people on waiting lists shows that demand. They 
have grown every year going back to the data I have in my 
testimony to 2005, well before the Medicaid expansion. They 
have grown it an average rate of 14 percent a year and there is 
significant variation across states.
    Eleven states and the District of Columbia have no waiting 
lists, and of these states without waiting lists only two 
haven't expanded Medicaid, Maine and Missouri. The two states, 
as was mentioned, with the longest waiting lists are Texas and 
Florida which have not expanded Medicaid. Another fact that is 
often overlooked is that people on waiting lists, the vast 
majority, are actually getting Medicaid so they are getting 
other services. The specialized services are very important to 
them but they aren't being left without the core services that 
Medicaid provides.
    So how do we deal with waiting lists? Certainly at CBPP we 
join the goal of people here to decrease them, but we think 
there are better ways to address the waiting lists than by 
taking savings from the three bills before you today to provide 
enhanced federal funds for states with the longest waiting 
lists.
    It would be much fairer to all states to provide incentives 
to enhance the provision of home- and community-based services 
which could include metrics to measure state progress. This 
could include continued funding for the Money Follows the 
Person program and the balancing incentive programs for which 
both the funding has expired. These were initiatives that have 
allowed states to make progress. The concern, and I think Mr. 
McCarthy said it as well, is by rewarding states with the 
highest waiting lists with higher match you really almost 
encourage states to grow their waiting lists.
    So in closing though I would like to note what I think the 
real threat to Medicaid is and to home- and community-based 
services specifically. The most recent House budget plan would 
have given states the choice of a block grant or per capita cap 
to achieve cuts in federal Medicaid funding of $1 trillion over 
10 years, cutting the program by 30 percent in the 10th year 
and then even more in the decades after this. Cuts of this 
magnitude would likely lead to huge increases in waiting lists 
or elimination of the programs altogether because these are 
optional for states.
    I thank you, I look forward to answering your questions 
about this and also about the bills. I can talk about those as 
well.
    [The statement of Judith Solomon follows:]
    
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    Mr. Burgess. The chair thanks the gentlelady. I really 
thank all of our witnesses for being with us today. This brings 
us to the question portion of the hearing and I am going to 
begin the questioning by recognizing myself for 5 minutes.
    Dr. Roy, Mr. Flores has a bill before us today that would 
require individuals to provide documentation of their 
citizenship or lawful status before the states begin covering 
them. Is this in fact a problem? Is this an area where 
regulation needs to perhaps be tightened up a little bit?
    Mr. Roy. If you talk to state Medicaid directors and other 
people at the state level they will say that this is a 
significant expenditure for them. And I am not aware of a CBO 
score for the previous--I know there has been a bill that has 
been scored previously along these lines, but I want to say at 
least several hundred million dollars potentially could be 
saved by ensuring you are dedicating Medicaid resource to 
people who are legally resident of the country and you don't 
have these windows where people who aren't documented are 
getting those benefits.
    Mr. Burgess. And just as a consequence of that there is no 
way to retrieve those dollars once they have been spent, once 
they go out the door they are gone?
    Mr. Roy. They are gone. And as I mentioned both in my 
written testimony and my oral testimony, to me the biggest 
challenge is what we see is most states when they face a cost 
crunch what do they do, they lower reimbursement rates to 
providers, particularly physicians, which ends up in particular 
harming access to care for the people who are enrolled in the 
program who are eligible for the program in reality.
    Mr. Burgess. And I appreciate your comments on that.
    Mr. McCarthy, under the Affordable Care Act of course 
expanded Medicaid and the expansion populations were eligible 
for a federal match of 95 percent this year, tapers down to 90 
percent in 2020 under current law. And there has been a concern 
expressed because a state that expanded is paying a smaller 
portion of the cost for care of the expansion population, in 
times of a budget crunch the incentive would be for a state to 
reduce services or benefits for the traditional population. Can 
you talk about the degree, do you think that this is a fair 
concern?
    Mr. McCarthy. Mr. Chairman, every state is different. They 
all make their different decisions. I would say that depending 
on where a state is and the number of advocates in that state 
for different services you would have to look at those things.
    I would agree with Dr. Roy that the first place a state 
would probably look is at reimbursement rates rather than 
looking at eliminating services for individuals. It partially 
goes back to what I was talking about on home- and community-
based services. If you, for instance in Ohio where we had a 
waiting list for our PASSPORT program, which was our waiver for 
individuals who are aged above the age of 60, the service that 
they could get is nursing home. But we had a 20 percent nursing 
home vacancy when I began that role, so where a person would 
end up is just in that higher cost service anyway so just 
further driving up the cost of the program.
    So that is the home- and community-based services we wanted 
to keep in place because that actually saved us a large amount 
of money. Actually, if you look at the Ohio program and you 
look at the number of people age 65 or older in January of 2011 
when the Kasich administration came into office and you just 
looked at how that actually grew the number of the people in 
the program and then you plotted against that a line of the 
number of nursing home bed-days that we paid for, that line 
actually went down.
    So that is what generated that savings in there so we used 
that savings to go back into the program to do that. So I 
understand your question of, well, it is only ten percent and 
we wouldn't get savings but at the same time the other costs 
are pretty large also. We hadn't talked about duals population. 
That for us in Ohio was a huge portion of the costs and growing 
costs. Also the Medicare growing costs that we had, so our Part 
D and Part B expenditures for this budget that just got put in 
ate up almost our entire growth of the Medicaid state share of 
the budget.
    So there is a lot of moving pieces in there. I am not sure 
of going to where there would be cuts in services would be the 
first place probably would be in provider reimbursement.
    Mr. Burgess. Which in turn has a deleterious effect 
downstream which Dr. Roy has detailed. Let me yield back my 
time and I will recognize the ranking member of the 
subcommittee, Mr. Green, 5 minutes for questions, please.
    Mr. Green. Thank you, Mr. Chairman. Multiple studies show 
that Medicaid is a lean and high-performing program that 
provides access to quality health care for those who need it 
the most. Unfortunately the bills we are discussing here today 
are rushed and not well thought out and could undermine the 
program and its beneficiaries. Medicaid matters and it works. I 
think we have been in an audience to alternative facts and 
skewed in some of the testimony we have heard.
    I would like to use my time to ask Ms. Solomon questions to 
help set the record straight. Ms. Solomon, what are the 
benefits of having Medicaid coverage? I read in a recent study 
that the folks are literally dying while waiting for Medicaid 
expansion, yet we hear from some that it would be better to be 
uninsured than have Medicaid. I would like to see if you can 
debunk that myth that it is better to be uninsured than to have 
Medicaid.
    Ms. Solomon. Thank you. I think that it is very clear and 
the data on access show that Medicaid patients have a usual 
source of care at rates approaching that of privately insured 
and double that of uninsured people. I think the studies that 
Dr. Roy has cited are really looking at people with serious 
illness and comparing people on Medicaid to others, and it is 
really unclear where they were. Were they insured before they 
got sick? And the expansion, what the expansion has done has 
allowed that to happen. So if we look at this 10, 20 years from 
now assuming we stay steady, I think we would see a very 
different picture.
    And I think what has happened in Louisiana where they are 
really documenting it is amazing. They have a dashboard that 
shows kind of how many cases of breast cancer have been 
diagnosed from their expansion that just started actually last 
year, how many cases of colon cancer, how many cases of 
diabetes and hypertension. You can look at that up to the 
minute.
    And what you are seeing is that in that expansion 
population that now has access to care, people are getting the 
exams and they are finding those things so that when people do 
have cancer and need surgery their outcomes will likely be 
better because they were covered up until the time that they 
got sick. Before the expansion you either had to be a very, 
very low income parent, a senior, a person with a disability, a 
severe disability. So what the expansion does is really open 
the door to allow access to care for everybody who can't afford 
to purchase coverage on their own.
    Mr. Green. Can you describe access to care in the Medicaid 
program, for instance the timeliness in which Medicaid patients 
are able to make an appointment with a primary care doctor? Are 
Medicaid patients generally satisfied with their care? Have 
there been studies on that?
    Ms. Solomon. Yes. I think there is high levels of 
satisfaction. And again, a study from researchers at the Urban 
Institute showed that timely care was at about 78 percent of 
people reported they could get care in a timely manner. And 
that again compared favorably with patients that were insured, 
and people that were uninsured had obviously a much harder time 
getting care they needed when they needed it.
    Mr. Green. Do you believe that the Medicaid program will be 
able to serve the same number of people with the same quality 
and same benefits if the program were converted to a capped or 
a block grant program? How would states adjust to a capped or 
block grant system?
    Ms. Solomon. It is impossible. With the level of those cuts 
the Urban Institute--and a prior proposal--estimated a loss of 
14 to 21 million people covered by the program after a few 
years. It is just impossible to serve the same number of people 
when you are making a cut of that magnitude. And I think over 
time, you would see cuts in provider payments. But you would 
see other things as well. You would see cuts in eligibility, 
you would see cuts in benefits.
    And I think when we are talking about home- and community-
based services you have to think about it from the perspective 
of you have people in nursing homes that is not, you are not 
going to be able to turn those people out of nursing homes so 
where are the cuts going to be made? I think the home- and 
community-based services are particularly vulnerable as the 
topic of today that it is worth highlighting.
    Mr. Green. Thank you. Mr. Chairman, given some of Ms. 
Solomon's answers I would like to submit two research studies 
for the record. The first study, the research that covers 
reducing mortality as evidence from states that expanded 
Medicaid prior to the ACA; and second, Mr. Chairman, 
illustrates the bipartisan support of the Medicaid program in 
the ACA expansion by both Republicans and Democratic governors. 
\*\ I ask unanimous consent to put those in the record.
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    \*\ The information has been retained in committee files and can be 
found at: https://docs.house.gov/meetings/IF/IF14/20170201/105498/HHRG-
115-IF14-20170201-SD006.pdf.
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    Mr. Burgess. Without objection, so ordered.
    Mr. Green. And I yield back my time.
    Mr. Burgess. The chair thanks the gentleman. The gentleman 
yields back. The chair recognizes the chairman of the full 
committee, Mr. Walden, 5 minutes for questions, please.
    Mr. Walden. Thank you very much, Dr. Burgess, appreciate 
it.
    Dr. Roy, I was intrigued by your, well, all of your 
testimonies, I read it all. It was all very helpful. I am 
curious, Dr. Roy, do you think it is appropriate for 
millionaires, maybe billionaires, to receive Medicaid while at 
the same time we do have people waiting for care? I mean I know 
we heard that there is nothing to that, but indeed we have 
heard from states.
    I have heard from Medicaid directors, I have heard from 
governors. They would just like the flexibility to close what 
some would say is a loophole that allows somebody to get a 
windfall. It is not just the lottery winner but it could be and 
it is in some cases, and then the way the rules are written 
they still qualify for Medicaid when actually they are flush 
with money. Do you think we ought to close that loophole? Does 
that harm somebody?
    Mr. Roy. I entirely agree with that Mr. Chairman, and let 
me take a minute to respectfully correct the record in terms of 
what Mr. Green did to characterize, how he characterized my 
remarks. I didn't say that Medicaid beneficiaries were worse 
off than people with private insurance, I said they were no 
better off based on the gold standard research which comes from 
work that was published in the New England Journal of Medicine, 
not known as a sort of alternative facts.
    Mr. Walden. It is actually a peer-reviewed journal of high 
renown, right?
    Mr. Roy. Absolutely. And my written testimony contains 14 
footnotes from peer-reviewed journals that discuss Medicaid 
help, how it comes in and the challenges thereof.
    Mr. Walden. See, and I approach this from the fact that why 
aren't we looking at the science, why aren't we looking at the 
peer-reviewed journal and saying, OK, what is wrong there and 
how do we fix it?
    Mr. Roy. Absolutely. And this is one of the things that I 
hope that this committee can do in a bipartisan way is say 
look, this is not about a debate about whether we should 
provide and subsidize and help people who need----
    Mr. Walden. Correct.
    Mr. Roy [continuing]. Health insurance who are poor, it is 
what is the best way to do that.
    Mr. Walden. Right.
    Mr. Roy. And I firmly believe that the best way to do that 
is through giving those patients more control over the health 
care dollars that are spent on their behalf. You get less waste 
and fraud, more accountability and more innovation in the 
delivery of health care.
    Mr. Walden. And in the meetings I have had with governors, 
just to continue this, they are begging for that flexibility at 
the state and local level. They are the ones that are managing 
and helping these patients. They have talked to me about really 
impressive things like, what was it, the high-risk assessments 
where they get around a person and say this is a person with a 
lot of issues going on.
    They may need this kind of health care, this kind of mental 
health care, they may actually need some modification of their 
house and yet they have to come beg Washington and some 
bureaucrat back here to get a waiver to do this that or the 
other thing or they can't plow the savings in to continue to 
expand and improve the patient's health.
    I have always approached this having been on a local 
hospital board and then working on this stuff in Oregon that 
you start with the patient and if you get your hands around it 
that is where I see it is going trying to devolve some of the 
decision making back to the states. Are there other examples 
that you have run across in your work where states have had 
innovative ideas and yet can't get past somebody back here in 
Washington to be able to implement it that would improve, 
improve patient care?
    Mr. Roy. We could spend all day talking about innovative 
ideas at the state level that have been stymied by CMS. One I 
can bring up is the Healthy Indiana program in Indiana. When it 
was first installed by then governor Mitch Daniels, they tried 
to do some very simple things to install a larger co-pay if you 
use the emergency department for non-urgent medical needs and 
instead they tried to create financial incentives for Medicaid 
enrollees to go to urgent care clinics or primary care 
physicians for those issues. They couldn't do it because it is 
contrary to the Medicaid statute passed by Congress in 1965. 
They can't even get a waiver for that because the statute 
itself forbids those practices.
    I can tell you it is not just policymakers at the state 
level who are concerned about these problems. If you have ever 
spoken to a patient who has spent a week trying to get a 
doctor's appointment for their child or for themselves and 
can't do it because so many physicians don't take Medicaid, 
those are heartbreaking stories.
    Mr. Walden. And don't your peer review data also show that?
    Mr. Roy. Yes.
    Mr. Walden. That the wait times are longer for Medicaid 
patients than for others, it is a fairly significant wait-time 
differential, right?
    Mr. Roy. Absolutely. And again in my written testimony I 
have referenced to some of that literature.
    Mr. Walden. I know in conversation I had with Governor, I 
think it is Governor Herbert from Utah talked about trying to 
be able to communicate with Medicaid patients in Utah by email, 
apparently some new and novel communication technique. He had 
to appeal to Washington to get a waiver, waited months, only to 
get an email from Washington saying no, sorry, you can't do 
that.
    Now I don't know what else was all involved there, but I 
assume they would have a backstop. If they didn't have e-mail 
you would still do other ways to communicate because not 
everybody does, but that struck me as something pretty bizarre. 
Do you run into those sorts of things? Is he unique?
    Mr. Roy. Every Medicaid director, Democrat or Republican, 
has stories like that. It is a huge problem. And again this is 
why it is not only important to give states more flexibility in 
how they manage these populations, but it is also important to 
give individuals more flexibility----
    Mr. Walden. There you go.
    Mr. Roy [continuing]. In how they use their health care 
dollars.
    Mr. Walden. Back to a patient-doctor, patient-provider 
system. I have used up my time. Thank you very much, all of 
you, for your comments, counsel and testimony. I yield back.
    Mr. Burgess. The gentleman yields back. The chair thanks 
the gentleman. The chair now recognizes the gentleman from New 
Jersey, Mr. Pallone, 5 minutes for questions, please.
    Mr. Pallone. Thank you, Mr. Chairman. My questions are to 
Ms. Solomon. There is a lot of misinformation, or maybe 
alternate facts is a better word, about Medicaid that continues 
despite all evidence to the contrary, so I would like you to 
help us set the record straight, Ms. Solomon. What do you say 
to claims that the Medicaid expansion funding threatens the 
truly vulnerable? Can you clarify why that is not the case?
    Ms. Solomon. Yes, thank you, Mr. Pallone. As I said in my 
written testimony, there really is just no correlation. And I 
think this was explored at the hearing yesterday and resolved 
that the states with the biggest waiting lists have not 
expanded. The states that don't have waiting lists in large 
part have expanded.
    Another metric is the state option that the Affordable Care 
Act gave states to actually provide HCBS services without a 
waiver. Eighteen states have taken that up. The option actually 
doesn't allow waiting lists, so this is opening up programs to 
everyone who qualifies. Eighteen states, fourteen are states 
that have expanded. So I think what you see, Texas 
unfortunately has one-third of the people, all the people on 
the waiting list is really no correlation between wait lists 
and the decision whether or not to expand. They are totally 
independent.
    Mr. Pallone. All right. And in a similar vein, Mr. Roy 
claims that Medicaid is simply fiscally unsustainable due in 
part to the Medicaid expansion under the ACA. Can you clarify 
why this is not the case? Why have most states that have 
expanded Medicaid for instance actually experienced net 
budgetary savings associated with the expansion?
    Ms. Solomon. I mean it is true and they have documented 
them. New Jersey, for example, has put out reports and they 
have saved money in a variety of ways, primarily by lowering 
their payments for uncompensated care through hospitals and 
other providers as Medicaid has picked that up. They have also 
been able to better utilize the services that they have already 
been providing to people with behavioral health conditions, 
mental health, and substance use disorders.
    And that is where the expansion--and I know it is really 
true in Ohio--has been particularly helpful in dealing with the 
opioid epidemic in allowing states to use their own dollars 
more effectively to wrap around services for people, for 
example, who are chronically homeless, and address the social 
determinates of health recognizing that health care is only a 
small part of what is going to keep very low income and 
vulnerable people healthy.
    Mr. Pallone. And Ms. Solomon, over the past 2 days in this 
committee we have heard from some sources that Medicaid 
expansion discourages work. It is my understanding that 
numerous studies have disproven the myth that Medicaid 
expansion diminishes work incentives and I want to know if that 
is correct. But also, furthermore, several states that expanded 
Medicaid have found that the expansion populations have not 
experienced greater job losses or work reduction, so would you 
comment on those?
    Ms. Solomon. That is absolutely right. And I think what the 
Medicaid expansion has been shown to do is allow people to work 
and to have greater earnings knowing that they can then 
transition to the marketplace and get subsidies or, assuming 
their employer doesn't provide work. The other thing that is 
really important particularly for people who have mental health 
and substance use disorders is that states are creating 
supported work programs so that they are able through Medicaid 
to provide the supports that people need to help them get a job 
and stay employed.
    And Medicaid has been able to do that not only for people 
with disabilities in the disability category but also for 
people in the expansion. Most of the people that are getting 
expansion coverage actually are people who are working but they 
are working in low wage jobs or part-time jobs or multiple 
part-time jobs that don't provide coverage. So Medicaid allows 
them to get the care they need to stay employed and to remain 
healthy, so it is a work support not a work discourager, I 
would say.
    Mr. Pallone. And then also the studies have found that 
Medicaid expansion likely improves the financial situation of 
those who gained Medicaid coverage under the ACA including 
reducing unpaid bills and medical debts. Just a few seconds 
left, if you could comment on that.
    Ms. Solomon. Absolutely. A National Bureau of Economic 
Research study shows that a dramatic fall-off in people with 
debt sent to third-party collections in states that have 
expanded Medicaid compared to states that haven't.
    Mr. Pallone. Thank you. Thank you, Mr. Chairman.
    Mr. Burgess. The chair thanks the gentleman. The chair 
recognizes the gentleman from Kentucky, the vice chairman of 
the subcommittee, Mr. Guthrie, 5 minutes for questions.
     Mr. Guthrie. Thanks. My first question is for Mr. 
McCarthy. There is a new CRS memo, CMS Collections of 
Information from states under the Medicaid Program that tallies 
the burden states face when complying with CMS requirements 
under current law. Mr. Chairman, I request unanimous consent 
this be placed in the record. \*\
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    \*\ The information has been retained in committee files and can be 
found at: https://docs.house.gov/meetings/IF/IF14/20170201/105498/HHRG-
115-IF14-20170201-SD003.pdf.
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    Mr. Burgess. Without objection, so ordered.
    Mr. Guthrie. This new memo shows that the reporting burden 
is higher than many people probably appreciate. One thing I 
have heard a lot over the past year is that CMS collects 
information from states but it is often focused on the wrong 
issues and it is not clear what CMS even does sometimes with 
the information reported. I mean we don't even have good data 
matching expenditures by category of service to beneficiaries, 
and everyone knows how bad Medicaid data is.
    I strongly believe in accountability for states, but I 
wonder if CMS has been focused on the wrong things at times. 
What reporting requirements do you think add costs and not 
value and what could we cut back on without negatively 
impacting accountability?
    Mr. McCarthy. I think what needs to be done is going 
through all of those reports that are identified in there to 
determine what information it is needed and how it will be used 
going forward. It is the same thing we did at the state when we 
came in. We looked at all the different reports we had and 
decided one way, should we keep the report or should we get rid 
of the report or is there something in there that we need?
    Often at the state level the report that we requested was 
partially due because a legislator at some point had asked for 
information and so you gathered that information and you just 
kept on gathering it. There are two reports from CMS that we 
always had to turn in. It was the CHIP report and also the 
EPSDT report, and I was unclear always of how CMS used those 
two reports. Our federal matching percentage isn't changed 
because of those. It doesn't go up or down. There is no 
penalties or rewards for those things.
    So I think that is a part of looking at those reports and 
saying OK, what information do we need? Information, giving 
that to CMS is very important. They get questions, you are 
talking about transparency especially on demonstration projects 
I know there is a number in there. We need to turn over that 
information, but the question is then how do they use that and 
if it is not good information or it is not used then let's let 
it go.
    Mr. Guthrie. So in your testimony you talked about CMS 
should be more focused on outcomes for patients in Medicaid and 
less prescriptive on how states get there, and I agree with the 
sentiment and direction. Can you think of a few concrete steps 
to move incrementally that direction?
    Mr. McCarthy. So we, many states I should say, use managed 
care plans, private sector managed care plans to help provide 
services to the population. You hold them accountable and it is 
often called pay for performance for the managed care plans. 
And what you do is you hold back a percentage of their 
capitation rates from one percent to five percent, and some of 
that is changing right now. So it provides that incentive and 
then you use some type of measure. We often use NCQA HEDIS 
measures to be able to then measure those plans. The better 
they did they could get that money back.
    So one of my ideas has always been, well, why doesn't CMS 
do the same thing with states and back off some of the command 
and control and instead hold states accountable for healthy 
outcomes. Dr. Roy brought those up. So if you have bad outcomes 
maybe a state should be penalized for that, but if you have 
good outcomes why isn't there an increase in funding for that 
state to provide that incentive? States do what we are 
incentivized to do. Right now the incentive is how do you draw 
down the maximum amount of federal dollars that you can get, so 
it is how do you move from that to something else that can be 
measured?
    Mr. Guthrie. OK, thank you. And just from some of the other 
things that we have talked about, I am from Kentucky and 
Kentucky is an expansion state, elected a new governor 
recently. And at some political peril to himself he decided we 
are going to try to figure out how to keep the expansion and 
make it work.
    And it is kind of news, it would be news to Kentucky that 
expansion has made the budget better. Maybe when the previous 
governor expanded it was a hundred percent federal, but the 
Medicaid program is going to take up 100 percent of the new 
additional revenues grown to Kentucky over the next biennium 
which means it is going to sacrifice what we can pay teachers, 
what we can do to colleges and universities.
    So our governor is actually trying to--and he is hearing 
some of the same rhetoric that we have heard in some of the 
opening statements. And when he is really trying to keep the 
program and make it better a lot of people say, well, keep it 
and make it better and he is trying to, and one of the things 
he is trying to do is co-pays.
    So there are people in the expanded population, so he has 
the traditional Medicaid, the disabled and the traditional 
Medicaid, looking at the expanded population--and he gets a lot 
of negative rhetoric for this. He says maybe they should pay $1 
minimum to $15 maximum for health care per month, and the other 
one is a work requirement. And he says that people are in the 
expanded population working. There are working poor in the 
expanded population, but some people aren't.
    And he says if you are able bodied and you are not, you 
should work at least 20 hours a week, volunteer work, and I 
think you can even classify maybe taking care of your 
grandchild. You can get it certified that as long as you are 
doing that 20 hours a week so somebody else can go work then 
you get credit for that. And so there are people trying to make 
this better and it is not sustainable the way that it is. And I 
know no one has offered a big tax increase to make Medicaid 
balance in states and at the federal level and so that is what 
we are trying to do. We are trying to be serious with it and 
have people covered and move forward.
    And I have run out of time so I will yield. I was going to 
ask a question but I ran out of time so I will yield back.
    Mr. Burgess. The chair thanks the gentleman. The gentleman 
yields back. The chair recognizes the gentlelady from Florida, 
Ms. Castor, for 5 minutes for questions, please.
    Ms. Castor. Thank you, Mr. Chairman. Mr. Chairman, many 
people in organizations are speaking out about the difference 
that Medicaid coverage makes in the lives of millions of 
Americans and they have contacted the committee this week to 
make their views on Medicaid known. And I would like to ask 
unanimous consent to submit some of their letters from the 
record including a letter from the National Coalition on Health 
Care opposing the defunding or repealing of the Medicaid 
expansion.
    The coalition represents nearly 90 of America's leading 
associations of health care providers. A letter from the Asian 
& Pacific Islander American Health Forum which works to improve 
the health of 20 million Asian Americans and nearly one million 
native Hawaiians and Pacific Islanders; a letter from the AARP 
representing 38 million seniors in all 50 states; a letter from 
the Save Medicaid in Schools Coalition representing more than 
25 organizations invested in the education of our kids; and a 
letter from the Association of American Medical Colleges 
representing the nation's medical schools and major teaching 
hospitals.
    This is just a sampling of the diverse array of groups that 
proactively have reached out to this committee just recently to 
express support for the flexible federal-state partnership that 
is Medicaid and to offer their ideas to truly strengthen and 
protect vital Medicaid services.
    Mr. Burgess. Will the gentlelady yield to accept her 
unanimous consent request?
    Ms. Castor. Yes, I will.
    Mr. Burgess. Without objection, so ordered.
    [The information appears at the conclusion of the hearing.]
    Ms. Castor. Thank you very much.
    Ms. Solomon, the fear is palpable across the country among 
families that the Republicans aim to devastate care that is 
provided through the Medicaid partnership, families that relied 
on skilled nursing and home and community based services, 
families with an Alzheimer's patient, children's health care 
especially kids with complex medical conditions, people with 
disabilities, and now according to many news sources at the 
start of the Trump administration it appears that yes, indeed, 
they intend to target families who rely on Medicaid for 
elimination of care and services disguised by the terminology 
of per capita caps and block grants.
    And this committee has put out a press release as recently 
as last night Republicans also plan to target Medicaid through 
reconciliation so we are gearing up for that. I want to get it 
clearly on the record what American families can expect if 
Republicans try to change Medicaid to block grants or per 
capita caps. It looks like a real draconian process.
    I have served on the Budget Committee the past few terms as 
a representative of the Democrats on the Energy and Commerce 
Committee and we have seen those budgets. And we have always 
had this backstop of President Obama and the White House and 
senators that said no way are we going to devastate care for 
families, but I think it is really at risk. You have studied 
these budgets that have passed the past couple of terms; is 
that right?
    Ms. Solomon. Yes, I have.
    Ms. Castor. And could you describe the impact on health 
services for American families that rely on Medicaid if that 
approach is enacted into law?
    Ms. Solomon. Yes. In my testimony Figure 3 shows the 
trajectory of cuts over 10 years from the latest proposal, the 
proposal for fiscal year 2017 and it is enormous. And it is 
very clear that what these proposals do is basically pull 
federal funds out of the program and shift not only the cost to 
states but the responsibility to deal with the cuts and it is 
the states that then have to decide where those cuts should 
fall. They have to figure out whether they can put more of 
their own money in at the expense of education and other vital 
areas of the budget. But these are cuts. These are cuts in 
federal funds changing the partnership dramatically.
    Ms. Castor. And how many Americans would be left without 
health care services?
    Ms. Castor. Well, as I said, the estimate from a previous 
proposal was somewhere between 14 and 20 million and the cuts 
get bigger over time. And they also can get bigger if things 
happen that are not anticipated. So the trajectory in my 
testimony shows what would happen based on expenses growing as 
expected.
    Ms. Castor. And we even have Republican governors speaking 
out against this approach. For example, Governor Charlie Baker 
of Massachusetts wrote recently we are very concerned that a 
shift to block grants or per capita caps for Medicaid would 
remove flexibility from states as a result of reduced federal 
funding. States would most likely have to make decisions based 
on fiscal reasons rather than the health care needs of 
vulnerable populations.
    Isn't that true that when you devastate care and take a 
hammer to the federal-state partnership you are really saying 
to states you have less flexibility to care for your citizens?
    Ms. Solomon. You certainly can innovate. States have been 
innovating and they have been getting flexibility to provide 
some upfront funding to build the technology they need to 
coordinate across providers and deliver care in a more 
coordinated way. That is gone under these proposals.
    Ms. Castor. Thank you. Mr. Chairman, I will yield back my 
time.
    Mr. Burgess. The gentlelady's time has expired. The chair 
thanks the gentlelady. The chair recognizes the gentleman from 
Texas, the vice chair of the full committee, 5 minutes for 
questions, please.
    Mr. Barton. Thank you, Mr. Chairman and thank you for 
holding this hearing. I was a little surprised to hear the tone 
and the tenor of our friends on the minority side. I have been 
on this committee 30 years. I missed the memo apparently where 
it said we were trying to gut Medicaid, destroy the program.
    The memo I got said that we have a budgetary crisis and we 
need to find ways to strengthen the program to reform and 
improve it and make sure that we get the money to the most 
vulnerable, and in doing that hey, we might give the states a 
little bit more flexibility. We might change the waiver process 
which is fairly bureaucratic. Again I am only the vice chairman 
and the past chairman and I have only been on the committee for 
30 years, so maybe there is some things that have happened 
behind my back and if so I will take that up with Chairman 
Walden and make sure it doesn't happen.
    I do know that the federal budget is about $4 trillion, Mr. 
Chairman. I know that the federal government is right now 
spending about $350 billion on Medicaid and that is supposed to 
double in the next few years. In total, state and federal 
spending is going to be about a trillion dollars. I also know 
that the expansion of Medicaid, which the Affordable Care Act 
engendered, added about ten million people to the rolls and we 
are spending in the neighborhood of $60 billion to cover those 
people and that as the federal hundred percent match is phased 
out the states are scrambling to find ways to continue to cover 
this.
    So I guess my first question to Dr. Roy, do you think it is 
possible to maintain the existing growth rate in Medicaid 
spending at the state and federal level and actually do it in a 
way that the hardworking taxpayers of America can afford?
    Mr. Roy. No, Mr. Barton. And I will go back to something 
that Ms. Castor said. There is no state in America that does 
not make decisions about care and coverage for the Medicaid 
population based on fiscal consideration today. Every single 
state does that today. Every single state did that last year 
and the year before that and the year before that because for 
every state in America Medicaid expenditures are either the 
number one or number two line item in their budget.
    So fiscal considerations are dominant in the way states 
have to manage their Medicaid programs and they don't, they 
simply don't have the flexibility to focus their resources, 
their limited resources on the needs of their populations.
    Mr. Barton. So you could say that the states right now are 
capitating Medicaid spending.
    Mr. Roy. They effectively are and in very ineffective ways 
by reducing reimbursement rates to physicians and to other 
providers. And if we gave them full flexibility, particularly 
if we gave individuals the flexibility to control the dollars 
that are being spent on their behalf for the health care needs 
that they have, we could dramatically improve their access to 
primary care, their access to specialist care and their access 
to high quality hospitals in a way that would substantially 
improve their health outcomes.
    We have been talking a little bit today about health 
outcomes for people in Medicaid versus being uninsured. The 
most important point I could make today is that health outcomes 
for people on private insurance are dramatically better than 
those for people on Medicaid. And so more----
    Mr. Barton. Well, we have three, this is called a 
legislative hearing so we have three bills before us. One of 
them has the radical idea that you should count lottery 
winnings. Now there are not very many of these lottery winners, 
6,000 I think nationwide. Would that gut Medicaid if we 
actually counted lottery winnings as part of the income test?
    Mr. Roy. Not in the least. If someone can afford private 
coverage or otherwise is not the kind of person who the 
Medicaid program is designed for it just defies common sense 
why we would devote those scarce resources to subsidize those 
individuals as opposed to the individuals who need the help.
    Mr. Barton. Congressman Flores has a bill that would say we 
give the states the discretion on covering undocumented workers 
or illegal aliens. They could cover it with their dollars but 
the federal government wouldn't have to automatically cover 
them; now that is a little bit more controversial. These are 
people that have come into country illegally, don't have the 
proper documentation. Do you think that the majority of the 
citizens and the taxpayers of the country would support that 
idea?
    Mr. Roy. As the child of immigrants to this country from 
this country from India I find it very puzzling that we are 
even having this debate. It seems entirely commonsensical that 
we would restrict Medicaid funding and resources to people who 
are legally resident in this country.
    Mr. Barton. In my congressional district if I did an 
opinion poll it would be about 95/5, 95 in support of 
restricting Medicaid to citizens or legal residents. With that 
Mr. Chairman, I yield back.
    Mr. Burgess. The chair thanks the gentleman. The gentleman 
yields back. The chair recognizes the gentleman Mr. Lujan, 5 
minutes for questions, please.
    Mr. Lujan. Thank you, Mr. Chairman. And Ms. Solomon, at the 
Center on Budget and Policy Priorities have you had a chance to 
review the Republican proposal, some of which was listed in 
Speaker Ryan's Better Way document on----
    Ms. Solomon. Yes.
    Mr. Lujan [continuing]. What they would do to Medicaid? Can 
you talk about that?
    Ms. Solomon. Yes. I mean I have mentioned it. It would 
really just shift huge amounts of costs to the states, as I 
said, along with the decisions of how to absorb the major cuts 
and also leave states shorthanded, essentially, if things that 
were not anticipated happened such as an epidemic. We have had 
the Zika threat, drugs, new blockbuster drugs, the ability to 
provide those to people, the aging of the population; all of 
the proposals are based on what the population looks like now.
    And we have that bulge of the Baby Boomers which right now 
are at the sort of lower end of the seniors, 10 years from now 
that is an older population and 20 years even more so. So none 
of that is really taken into whatever the formula would be that 
we would have a lot more people who are very old and need a lot 
more care. So basically states would have to figure out how to 
deal with that.
    Mr. Lujan. So Ms. Solomon, I know this is a complex issue 
as we are trying to better understand it to do our due 
diligence to make a difference to keep this program strong. The 
way that I understand, when the federal government shifts costs 
to the states that means that the federal government is going 
to cut the federal investment and put that burden on the state. 
Is that a fair assessment?
    Ms. Solomon. That is it. I mean that is exactly what these, 
we call them block grants, we call them per capita caps, but 
they are cuts. They are cuts in federal funds when it is very 
easy for Congress to do it because it really leaves the states 
with the hard decisions of how to absorb that change in the 
partnership between the federal and state government.
    Mr. Lujan. I appreciate that Ms. Solomon. So if there is 
any question associated with the Republican plan, I think 
Speaker Ryan has something called a Better Way that everyone 
can go take a look at that pamphlet. And when we are talking 
about what is happening here, if you are saying and using 
terminology to shift the cost from the federal government to 
the states that means you are cutting the program. I don't know 
why we are parsing over this. It is what it is. Let's just 
accept the programs that both sides are putting forward here.
    Now there is a lot of conversation, Ms. Solomon, associated 
with one of these areas and a term that we are learning more 
about called the reasonable opportunity period which is being 
talked about in one of these bills. It is my understanding that 
there is a verification process that has been established when 
someone applies for these programs that you have to submit your 
Social Security Number or documentation.
    In cases maybe where Social Security doesn't exist, but 
where it does exist you submit that that is verified Social 
Security Administration whether someone is eligible or not. If 
they don't have their Social Security Number or their Social 
Security Number process is not one that is recognized by the 
Social Security Administration then an applicant would submit 
paperwork to show that they are citizens and then they would be 
put in this what is called an ROP. So can you tell me if there 
is challenges for naturalized citizens?
    Ms. Solomon. Yes.
    Mr. Lujan. Do they have to submit additional paperwork and 
then would they land up in an ROP? Would citizens born outside 
of the United States fall into that situation and have to fall 
into an ROP and namely children born on military bases outside 
of the United States, would their number fit into that process 
and would they fall into this ROP?
    Ms. Solomon. Yes, those are the groups that would be most 
affected by the bill that is before you because that bill if 
you look at the language it talks about aliens declaring that 
they are citizens. It actually affects the verification process 
for people who are attesting to being citizens or U.S. 
nationals. A vast majority of those individuals have their 
citizenship verified electronically pretty instantly by the 
Social Security Administration.
    There are several groups, the groups that you mentioned, 
naturalized citizens, people who are born abroad, say, to 
military parents and some newborns who have to provide 
documentation because Social Security can't verify it quickly. 
The reasonable opportunity period was put into the law after we 
saw large numbers of children and others not being able to get 
through this without delays so that they could get benefits 
while they were submitting their documentation.
    Mr. Lujan. Thank you, Ms. Solomon. And as my time expires, 
Mr. Chairman, I think that we all want to make this system 
work, but citizens of the United States should not be left out. 
Thank you very much.
    Mr. Burgess. The gentleman yields back. The chair thanks 
the gentleman. The chair recognizes the gentleman from 
Illinois, Mr. Shimkus, 5 minutes for questions, please.
    Mr. Shimkus. Thank you, Mr. Chairman. It is great to be 
here, great new hearing room and so I get to do the inaugural 
chart through this new technology. Obviously we are talking 
about the budget and we are talking about spending. I think you 
can see it.
    [Chart shown.]
    Mr. Shimkus. You should be able to see it right--can't they 
see it in front? All right, see, it is all new to us. So you 
got it right in front of you. Does anyone dispute this as a 
federal budget pie in 2015? No. Mr. McCarthy?
    Mr. McCarthy. No.
    Mr. Shimkus. Ms. Solomon? No, that is it. Now, so we are 
debating--look, this is an important budget chart to show that 
we fight our budget on the blue area which is the discretionary 
numbers. The red is the mandatory, the red is spending out of 
control and as that continues to grow it squeezes the blue 
portion.
    And Ms. Solomon, you mentioned it on Medicaid, or someone, 
Mr. McCarthy, you mentioned it on Medicaid. As Medicaid in the 
states expand it squeezes schools, public health, state 
budgets, so the debate on reforming the process to make it 
solvent, I think, is a very fiscally responsible debate, but 
people have to see the whole chart. So really, our challenge 
here is try to address the mandatory spending and make it 
fiscally sustainable and then we don't have these discretionary 
budget fights. So that is just a good way to start.
    Now I want to go to specific questions. Mr. Guthrie just 
returned. He kind of talked a little bit.
    You can take that chart down now unless we want to keep it 
up just for the allure of it.
    But Mr. Guthrie at the end of his filibuster kind of 
started talking a little bit about the, what we call the work 
requirement. So I know, Mr. Roy, you have done some research on 
that. Can you talk about that ``work requirement'' as far maybe 
some possible reforms?
    Mr. Roy. Yes. So let me highlight, Mr. Shimkus, one of the 
things that we in the health policy community support about a 
work requirement and that is that there is a lot of emerging 
research that shows that individuals who have health insurance 
and who have health care needs who have work, who have a job 
are much more engaged in their actual health care and just the 
wellness that comes with having a job, going to work every day, 
feeling needed.
    A lot of these things are subtle, but the research is quite 
compelling in showing that people who have jobs do a much 
better job in terms of health outcomes versus people who don't. 
Not because of income because you can stratify these results 
for income, but because of their engagement in their own lives 
and their own health. And so a lot of what I think our ambition 
is is to see a work, a relationship between work and the 
Medicaid program and other programs that help low-income 
individuals so that there is an encouragement for those 
individuals to be engaged in their lives and engaged in their 
health.
    Mr. Shimkus. And these are not, the elderly or the disabled 
are not involved in this work requirement discussion, correct?
    Mr. Roy. Correct.
    Mr. Shimkus. And Mr. McCarthy, having your experience in 
the state you know that the 1115 waiver supposedly has that 
ability to do that. Can you talk about how a requirement that 
an individual not just take from the Medicaid program but 
actually give back to the community can help that individual?
    Mr. McCarthy. So from the standpoint of what we saw in Ohio 
as many of the people on the program were working so we 
believed--and we had a Healthy Ohio waiver which we turned into 
CMS that was disapproved--that having people participate not 
only in their health care but in just making their lives better 
would be something that would be beneficial to everyone.
    I think one of the things that we get distracted on, and 
somebody brought this up earlier, was the issue just simply 
work. There was a discussion of could it be education or other 
things that are going on, just engagement of a person to say 
here is the things we need to do. Many people are already doing 
it. There is a subset that is not, so let's engage them to 
figure out what that is that they can do to better themselves.
    Now there was----
    Mr. Shimkus. Let me in my last 45 seconds ask, don't we do 
this already for TANF, for the Temporary Assistance for Needy 
Families, isn't there some quantification right there already 
and that could be used in that same process?
    Mr. McCarthy. Yes.
    Mr. Shimkus. I yield back my time.
    Mr. Burgess. The gentleman yields back. The chair thanks 
the gentleman. The chair recognizes the gentleman from 
Massachusetts, Mr. Kennedy, 5 minutes for questions, please.
    Mr. Kennedy. Thank you, Mr. Chairman. I appreciate the 
opportunity here. I want to thank the witnesses for being here, 
discuss an important topic to our health care system and the 
underpinnings for how we try to make good on a promise that 
everyone in this country gets access to the care that they need 
when they need it and that is a fundamental bedrock for not 
just our medical community but our society. No one wants to be 
checking a health insurance card after you get hit by a bus, or 
a passport or for a green card.
    So the question then is, getting back to the pie chart Mr. 
Shimkus put up, is yes, there is issues on the discretionary 
spending and the mandatory spending side, and the focus of this 
hearing is looking at that smallest piece of the mandatory side 
and taking out that side interest on the debt and squeezing out 
efficiencies there, which I would point out is close to 50 
percent of the Defense Department budget.
    So I think it is also important to put these reforms in 
context and to put a human side on them too. As we consider 
these reform bills that we go through we should remember that 
there is by some estimates 32 million Americans that are on the 
cusp of losing health insurance depending on what this 
committee decides to do.
    I toured a series of community health centers last week in 
my district and you heard the same message from their doctors, 
from their patients, from their advocates, from their staff 
which was don't sabotage the Affordable Care Act, don't gut 
Medicaid expansion and don't jeopardize the progress that we 
have made in our health care system. It is not as simple as 
redirecting that funding.
    As more and more people lose coverage and access to 
preventive care which many of them can get from a community 
health center they turn to emergency room treatment, then 
uncompensated costs go up at hospitals and premiums increase 
with them. One of the health centers I visited, the North Shore 
Community Health Center, Medicaid makes up 60 percent of the 
total patient service revenue. Statewide community health 
centers serve over one-fifth of all Medicaid beneficiaries in 
the Commonwealth of Massachusetts and account for less than two 
percent of our Medicaid expenditures.
    So yes, while we need to look for innovative ways to 
deliver new care we should dismiss catchy ways to kick people 
off of Medicaid. We should be debating reforms that would 
replicate those efficiencies that we have seen across the 
country. In Massachusetts by the way--that has a 2.8 percent 
unemployment rate and a 2.8 percent uninsured rate, the idea 
that the Affordable Care Act is somehow a job killer is 
demonstrably false, as we have seen in Massachusetts.
    So we also know that going forward the immediate repeal of 
the Affordable Care Act would result in a loss of three million 
jobs worldwide, would lead to $165.8 billion in hospital losses 
over the next 8 years, Medicaid expansion would, in fact the 
progress we have made on lowering marketplace premiums would be 
gone, and repeal without a replacement would lead to nearly 
44,000 deaths annually by conservative estimates. There is a 
reason why Republican governors, many of them represented in 
states that my colleagues here represent, are begging Congress 
to try to defend that Medicaid expansion.
    And I would like unanimous consent, Chairman, to submit for 
the record a letter by my governor, Republican Charlie Baker, 
in response to a solicitation put out by leader Kevin McCarthy, 
detailing some of the reforms that he would like to see going 
forward as a health care executive, former health care 
executive.
    And he mentions in here, Chairman, that maintaining state 
health care safety nets including retaining existing federal 
health subsidies and uncompensated care pools that support 
health care coverage and charity care providers, avoiding 
proposals that only offer more flexibility and control in 
exchange for shifting costs to states, providing flexibility 
with then pulling back money does not solve the problems that 
we have heard from today.
    Mr. Burgess. Will the gentleman yield for action on his 
unanimous consent request?
    Mr. Kennedy. I will for that. Thank you.
    Mr. Burgess. Without objection, so ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Kennedy. Thank you, Mr. Chairman. So I realize I 
filibustered there for a little while, apologies. But Ms. 
Solomon, two very simple questions and then just so I leave 
with: do you support repealing the Medicaid expansion and do 
you believe that health outcomes improved in states with 
expanded Medicaid versus those that did not?
    Ms. Solomon. I obviously support the expansion and do 
believe that it has made a huge difference in the states that 
have expanded in addition to lowering the un-insurance rate, 
more people getting care, its evidence is indisputable.
    Mr. Kennedy. And then very briefly since we have about 30 
seconds left, the largest payer of mental health services in 
this country is Medicaid. There has been in this committee a 
bipartisan commitment to look at some of the issues around 
mental health. How can we possibly address the systemic 
failures of our mental health system without addressing 
Medicaid?
    Ms. Solomon. You can't because it really is providing the 
foundation for things such as the initiatives that were in the 
CURES bill and elsewhere. Those are going to wrap around the 
foundation that is provided through Medicaid for behavioral 
health services.
    Mr. Kennedy. Thank you and I yield back.
    Mr. Burgess. The gentleman yields back. The chair thanks 
the gentleman. The chair recognizes the gentleman from 
Pennsylvania, Mr. Murphy, 5 minutes for questions, please.
    Mr. Murphy. Thank you, Mr. Chairman. First, Dr. Roy, you 
were talking about how people who are on Medicaid don't really 
differ much from people who have no insurance at all and cited 
a few studies, looked at things like cancer, diabetes rates and 
things like that. And I just want to make sure I got it on the 
record you are not implying that being on Medicaid causes 
cancer.
    Mr. Roy. Of course not.
    Mr. Murphy. That being on Medicaid worsens cancer or 
reduces life span, and you also say that people who are on 
Medicaid, the doctors are paid below market rates, and you are 
not saying that when doctors are paid less that reduces life 
span, but you are talking about an access to care.
    And I believe one of those studies, I looked it up here, is 
also Kwong, et al., University of Pittsburgh, my alma mater. 
But what is happening is that people actually come in worse. 
They put off care. And this is where I agree with some of my 
colleagues on the other side of the aisle, when people don't 
have insurance they put off care.
    And it has actually been some of the problems of the 
Affordable Care Act. It was supposed to have been that it would 
increase outpatient visits and actually reduce inpatient and 
emergency room visits and it has had the opposite effect 
because what people have found they have high co-pays and 
deductibles. Does that make sense?
    Mr. Roy. That is correct. Emergency room volume has 
increased through the Medicaid expansion and it has not 
increased the rate of primary care physician access relative to 
what Medicaid's performance was previously.
    Mr. Murphy. Mr. McCarthy, I want to understand. You had 
made some references in your comments about co-pays and 
premiums that were reasonable and enforceable which should 
keep--is that meant to keep people from the emergency rooms and 
keep those costs down?
    Mr. McCarthy. It is designed, the purpose of it is to have 
a person actually make a choice of where they are going to go 
and make a reasonable choice to say----
    Mr. Murphy. I understand. And the same thing with 
formularies and for drugs there, because initially we were 
trying to grapple with that when dealing with the cost of drugs 
that formularies and negotiated drug prices in selecting one 
can be part of a cost savings, correct?
    Mr. McCarthy. Right. The problem with the Medicaid program 
right now is that a state is forced to cover every FDA-approved 
drug and it leaves you with no negotiating room for new drugs.
    Mr. Murphy. OK. And part of the issue we dealt with here on 
another hearing was that when a state chooses, for example, a 
formulary in mental health drugs that assumes that all anti-
depressants are anti-depressants the same and all anti-
psychotics are the same just because they have that same 
function, they are not the same because they have different 
side effects and because of different side effects people may 
not take them. When they don't take them their situation gets 
worse.
    And I know that Ms. Solomon, you also made some comments 
about when people have to make a choice about care and they are 
on waiting lists to get into long-term care. And I am assuming 
you would be supportive that if there was an option for an 
alternative payment model and if someone could be cared for in-
home that would save money and probably be more preferable to 
that patient. Am I correct?
    Ms. Solomon. Absolutely. And there are multiple options and 
flexibilities for states that want to do that including the new 
state option for home and community based services. This is 
where there is enormous flexibility in Medicaid for states to 
pick up different ways of doing that.
    And as Figure 1 in my testimony shows, the result has been 
that----
    Mr. Murphy. I have to cut you off. I am trying to get to 
another point here, but if you can get me that I want it 
because here is the thing I want you to think, although I think 
we are not there yet. We are talking about moving around how 
things are paid for, whether doctors are paid more, what is 
happening there. A number that keeps coming up to us is that 5 
percent of the people on Medicaid account for 55 percent of 
Medicaid spending and they are not a homogeneous group.
    One thing I would like to submit, Mr. Chairman, is an 
article by Gregorio, et al., on inflammatory bowel disease in 
medical homes, talking about this in an op-ed that I wrote 
called A Better Model for Healthcare in America from the 
Washington Examiner that when you actually wrap service around 
something and you identify the over utilizers versus someone 
who just is a high utilizer you can make a massive difference.
    So not all of those people on Medicaid are the same, and it 
isn't just paying doctors more. This is where I want to know, I 
am not sure the bill, I mean the bills we are dealing with 
today have some effects here on spending but they don't have an 
effect on changing medical models. So now Ms. Solomon, if you 
can complete your thought, how do we change an alternative 
spending model that saves money in Medicaid and provides better 
care? You have 30 seconds.
    Ms. Solomon. It is going on today in multiple states that 
have done exactly what you are saying, identify those high 
utilizers. The health home program that was in the Affordable 
Care Act, things like the programs at the Camden Coalition 
which has become a national model----
    Mr. Murphy. Very important. Can we do more to incentivize 
those, because as some of those even worked it is kind of state 
by--the Camden model is a great model, but the question is, and 
this is where I would like all of you to get back to this 
committee, it is extremely important that we find ways of 
effectively helping those and it isn't just going to be raising 
their co-pays and deductibles to do that.
    With that Mr. Chairman, also one other thing I want to ask 
unanimous consent to submit for the record. It is a letter from 
the National Association of Psychiatric Health Systems too, on 
these models too.
    Mr. Burgess. So just to clarify the gentleman had two 
unanimous consent requests?
    Mr. Murphy. Three.
    Mr. Burgess. Was there one embedded in that previous 
discussion?
    Mr. Murphy. There is three. One is an article by Gregorio, 
et al., where----
    Mr. Burgess. Without objection, so ordered.
    The gentleman's time has expired. The gentleman yields 
back. The chair recognizes the gentlelady from California, Ms. 
Eshoo, for 5 minutes for questions, please.
    Ms. Eshoo. Thank you, Mr. Chairman. Glad to be back on the 
subcommittee. I am a returning member because I did serve on 
this subcommittee for several years. Thank you to the 
witnesses. There is an advantage to coming in a little later in 
terms of asking questions because we have been listening to 
both questions, answers, comments of members.
    My takeaway on the three bills here is that they, all three 
of them, change Medicaid eligibility requirements, and when 
eligibility requirements narrow some Medicaid beneficiaries who 
previously qualified for coverage will no longer qualify and 
will lose their Medicaid coverage. So the results in coverage 
are essentially being taken away from these people, so this is 
subtraction. This is subtraction. That is my take on the three 
bills. I could say more about them. I am just fascinated with 
some of the things that have been said.
    Now I want to go to you first, Dr. Roy. I am not familiar 
with your organization, the Foundation for Research on Equal 
Opportunity. Who funds you?
    Mr. Roy. We are a nonpartisan, nonprofit think tank that 
has donors from----
    Ms. Eshoo. Yes, but who funds you? Where does the money 
come from?
    Mr. Roy. The money comes from donors just like every other 
think tank who are individuals.
    Ms. Eshoo. And who are they? Who are your major donors?
    Mr. Roy. We don't disclose our donors. We are 4 \1/2\ 
months old.
    Ms. Eshoo. Does the committee require in the witness 
background to submit to the committee who funds organizations, 
et cetera that witnesses come here to testify on behalf of? If 
we don't I think that we should consider that.
    Mr. Roy. I am not testifying on behalf of donors. I am 
testifying on behalf of the Foundation for Research on Equal 
Opportunity and myself.
    Ms. Eshoo. Well, that is why I am asking about the 
Foundation because we have foundations and we have foundations. 
But since you don't wish to disclose, I think that the 
committee should for all witnesses make that determination and 
make it a requirement so that members do know.
    Now did you support the ACA when it was passed?
    Mr. Roy. We don't take institutional positions on 
legislation.
    Ms. Eshoo. Do you support it today?
    Mr. Roy. What I do support----
    Ms. Eshoo. No, no, no. Answer it. I only have 5 minutes.
    Mr. Roy. What I do support is universal coverage, and we 
have put out a plan to achieve universal coverage.
    Ms. Eshoo. Do you support the elimination of Medicaid?
    Mr. Roy. I don't support the elimination of Medicaid. I 
support covering everyone who needs financial assistance to 
afford health insurance.
    Ms. Eshoo. Right. In your research--the chairman of the 
full committee made mention of millionaires and billionaires 
who use Medicaid. In your research have you found anyone in 
those two categories that are in Medicaid, using Medicaid?
    Mr. Roy. There are lottery winners who by law if they 
receive all their income in a lump sum in 1 month----
    Ms. Eshoo. So it is lottery winners, and how many of those 
are there?
    Mr. Roy. It is not merely lottery winners. It is anybody 
who receives a lump sum payment. So for example someone who 
received a financial bonus from work----
    Ms. Eshoo. So if someone is in an automobile accident and 
there is a settlement then that makes them a millionaire or 
billionaire. I have to tell you that this is a bad rub when 
these things are thrown around that millionaires and 
billionaires are on Medicaid.
    Mr. McCarthy, do you support eliminating the federal 
dollars of Medicaid and then have the states be the 
laboratories of invention and be able to expand or contract or 
write their own rules with their own money and believe that 
people will still be served?
    Mr. McCarthy. I believe that people can be served if the 
states are given the proper flexibilities in whatever----
    Ms. Eshoo. No, I am asking about the federal dollars 
though, picking up on Ms. Solomon's testimony.
    Mr. McCarthy. If the federal dollars change the states 
will----
    Ms. Eshoo. Do you support subtracting the federal dollars 
out and just have the states carry out with their own dollars 
whatever they want to design?
    Mr. McCarthy. If you are asking if all federal dollars, no. 
That would be very difficult for a state to do.
    Ms. Eshoo. Sure would. And at what point do you support the 
reduction of federal dollars? What level reduction are you----
    Mr. McCarthy. It depends on what flexibilities are given to 
states. Those two things have to go hand in hand.
    Ms. Eshoo. So you don't want to name the amount of dollars 
that you are willing to subtract as a former director of the 
program from a state, from a major state.
    Mr. McCarthy. Again it would depend on what flexibilities 
come with it.
    Ms. Eshoo. Ah-ha. So we want the money for sometimes, we 
don't know how much but someone is going to decide it. That is 
quite a proposition. Well, what the conclusion that I have come 
to, and it is not hard listening to the testimony, is that 
there is really not support for this program and so there is a 
nitpicking around the edges.
    In anything we do there is always room for improvement, but 
this, I don't think today's hearing is about improvement. I 
think it is about elimination, subtraction and I don't----
    Mr. Burgess. The lady's time has expired.
    Ms. Eshoo [continuing]. Think your surveys and whatever you 
presented in your testimony are reliable or acceptable because 
I think they hurt people. Thank you.
    Mr. Burgess. The chair would request that we respect other 
members' time, and I am now going to recognize Mr. Lance from 
New Jersey 5 minutes for questions. Mr. Lance lost interest. 
Mr. Griffith, 5 minutes for questions, please.
    Mr. Griffith. Thank you very much. I appreciate our 
committee working hard on this. As you have heard we can always 
make things better. And one of the things that the American 
people want and my people that I represent in Virginia and my 
district want is folks to make sure that if they need the help 
they get it. But if they suddenly find themselves millionaires 
because they won the lottery or they have gotten some other 
lump sum payment, they don't think those folks ought to 
necessarily be getting Medicaid.
    And so while I have heard it said that throwing it around 
that millionaires are getting Medicaid is a bad rub, currently 
it is a bad rub the average hardworking American taxpayer is 
paying for it, wouldn't you agree, Dr. Roy?
    Mr. Roy. My foundation, the Foundation for Research on 
Equal Opportunity is dedicated to expanding economic 
opportunity for those who least have it. Generally speaking, 
millionaires and billionaires are not people who at least have 
economic opportunity in this country.
    Mr. Griffith. And in fact when I read the bill I noticed 
with some interest that I thought it was fairly generous 
because it basically allocates it out as roughly $40,000 a 
month for the first, say, hundred thousand and then it is more 
than that. So it is not like we are saying that if you win a 
million dollars you can never be on Medicaid again, it is 
fairly loose. Wouldn't you agree?
    Mr. Roy. I mean to me it is very simple. If you can afford 
to buy health insurance yourself, please do so. If you can't 
afford health insurance on your own and you need the financial 
assistance and are eligible for the financial assistance that 
Medicaid provides then let's find a way to get you that 
assistance. It seems completely non-controversial and I really 
don't understand why members of the minority find this 
problematic.
    Mr. Griffith. And I am going to switch gears but stick with 
you, Dr. Roy, if I might. In your written testimony, and I 
don't believe you have had an opportunity and I apologize if I 
have missed it somewhere, but I don't believe you have had an 
opportunity to discuss it. On page 8 of your written testimony 
you start getting into issues about how ``the interest of state 
and federal governments have diverged in Medicaid because of 
the way it is set up.''
    And I am not sure these bills directly get to that but I 
thought that was interesting testimony because it is one of the 
things that has been a bad rub for Virginia. And that you then 
go on to talk about how the federal government has done some 
things that maybe they ought not to have done and the state 
governments have responded and done some things where they came 
up with creative financing and you actually reference Medicaid 
hospital taxes. And in Virginia we rejected that concept 
because we saw it as a tax on the sick and that they wanted to 
create a bed tax where, if you were a Medicaid patient you 
would get the money back as increased costs and you would 
receive as you said in your testimony whatever your match was, 
in Virginia it is 50 percent but you used 60 percent in your 
example, you would get that money back and so the states have 
actually gamed the system in some states to get more federal 
dollars from Medicaid and in some cases like New York they have 
actually had to have reforms because they gamed it so much they 
had so much money floating around they were wasting millions of 
dollars. Isn't that true?
    Mr. Roy. Absolutely. And a number of the states in fact 
nearly I would say a majority of the states that have expanded 
Medicaid under the ACA in theory there----
    Mr. Griffith. Just a second. Mr. Chairman, I am having a 
hard time hearing.
    Mr. Burgess. The gentleman is correct and the time will 
suspend. The chair notices a significant difficulty hearing the 
testimony of the witness even with amplification, so could I 
ask conversations be taken off the dais in respect to our 
witnesses who have agreed to be with us this morning?
    Mr. Griffith. Thank you.
    Mr. Burgess. The gentleman continues to suspend. 
Conversations off the dais to allow the witnesses a chance to 
be heard. The chair thanks the committee. The gentleman may 
proceed.
    Mr. Roy. A majority of the states that have expanded 
Medicaid under the ACA have used provider taxes and health 
insurance premium taxes to fund the theoretical ten percent 
match that they are supposed to contribute. We have heard some 
descriptions of the so-called savings that states have achieved 
by expanding Medicaid. There are no so-called savings.
    What has happened is that state governments have raised 
taxes on Medicaid providers and on managed Medicaid managed 
care companies and use those revenues to fund the Medicaid 
expansion in their states, in other words increasing the 
federal liabilities for the Medicaid programs in ways that the 
ACA did not contemplate.
    That is not just true of the ACA. In my written testimony I 
cite the fact that on average the FMAP, the match rate at the 
federal level is around 58 to 60 percent. At least that is what 
it is supposed to be on paper, in reality it is closer to 70 
percent because of these taxes that states use to game the 
system and attract raised costs in the Medicaid program and 
drive revenue to the states from the federal government that 
they otherwise wouldn't gather and aren't supposed to obtain.
    Mr. Griffith. And I want to summarize and probably then 
have to conclude, but in summary, if the federal government 
gives the state $2 million and the state was only going to 
spend a million dollars, the state has not saved a million 
dollars, the federal government has spent a million dollars it 
maybe didn't need to.
    Well, I support all three of these bills, but I would 
invite all of our witnesses if you have ideas on ways that we 
can improve these bills, please let us know because we are 
trying to make sure--I agree with the philosophy, but if there 
is some way that we can make the bills better, please let us 
know and I would appreciate it very much if you will give that 
in writing. That would be great. And with that Mr. Chairman, I 
yield back.
    Mr. Burgess. The gentleman yields back. The chair thanks 
the gentleman and the chair recognizes the gentlelady from 
Colorado, Ms. DeGette, 5 minutes for questions, please.
    Ms. DeGette. Thank you so much, Mr. Chairman, and it is 
good to be back on the committee, on the subcommittee, although 
this morning I can't help but feel like I am in a Lewis Carroll 
book because here we are talking about lottery winners and 
undocumented people getting Medicaid, but then the testimony 
particularly from the majority witnesses is all about the full 
Medicaid expansion.
    We saw this yesterday in the Oversight and Investigations 
hearing on the Medicaid expansion and I think we really need to 
clarify what we are talking about. I don't think the biggest 
problems facing Medicaid are lottery winners getting Medicaid 
advantages, and also under current law although it may not be 
good from a health care policy standpoint, people who are not 
citizens or have documentation they can't get Medicaid right 
now under current law. And with respect to people who are 
vulnerable, as has been demonstrated by all of the evidence, if 
you expand Medicaid then you actually are more able to insure 
the vulnerable.
    So let's talk about what we are really discussing today 
under the guise of these three bills. What we are really 
discussing today is the majority's intention to gut the 
Medicaid expansion for a variety of reasons. And that is what I 
want to talk about.
    Ms. Solomon, I want to ask you, now I understand that in 
the Medicaid expansion under the Affordable Care Act 80 percent 
of the people who are getting that Medicaid expansion are 
actually working; is that right?
    Ms. Solomon. That is right.
    Ms. DeGette. What is the situation with the other 20 
percent of the population?
    Ms. Solomon. So it is varied, but you do have a large share 
of people if you think about who was not covered by Medicaid 
before and is picked up by the expansion you have the people we 
sort of shorthand call the childless adults. And these are 
people that didn't fit a category and we did away with the 
categories. So you do have people who are chronically homeless, 
people with substance use disorders, people with mental illness 
and then just a group of people who are caring for family 
members and low income, unable to work.
    So it is probably a diverse population, but there really 
isn't--the people that are mostly affected are the people who 
didn't have a pathway to coverage before and who were working 
because they were working in jobs without coverage.
    Ms. DeGette. And how did those people get their health care 
before we had these Medicaid expansions?
    Ms. Solomon. They didn't. I mean they didn't have insurance 
so they----
    Ms. DeGette. Well, if they got sick what did they do?
    Ms. Solomon. Yes. They went to the emergency room. They 
went to hospitals. They went to community health centers that 
would----
    Ms. DeGette. Right, and eventually we the taxpayers paid 
for that, right?
    Ms. Solomon. Correct.
    Ms. DeGette. Now you heard Dr. Roy say that he did a 
study--and Doctor, I read your testimony and also the article 
that you wrote that you cited in your testimony. And he said 
that the data shows that people on Medicaid have no better 
outcomes than people who are uninsured. Is that supported by 
the rest of the data?
    Ms. Solomon. I don't think so. People are getting care. And 
I think again the studies are very, very narrow and they look 
at people with very serious illnesses, and I think Dr. Roy said 
that they came in late. They didn't have their conditions 
diagnosed, and that is exactly what the Medicaid expansion is 
allowing. I would just commend everybody to look at the 
dashboard in Louisiana where they are tracking the people that 
are being found through their pretty new expansion.
    Ms. DeGette. OK. So some of you who were at yesterday's 
hearing in O&I, I talked about some of the people I had last 
week in Denver. I had a listening session for people to come 
and talk about their experiences in the ACA. And I had one 
woman, Lisa Scheim of Denver. She developed a neuroimmune 
illness and so she has only been able to work part-time. 
Because she works part-time she is not eligible for insurance 
through her employer, and before the ACA she was rejected for 
insurance because she had a preexisting condition.
    We had a high risk pool in Colorado, but the premiums were 
so high she couldn't buy in. So then she got ulcerative colitis 
and an autoimmune disease, she couldn't even go in for a 
diagnosis because she couldn't pay for it. Finally she got a 
part-time job but she couldn't get insurance. In the meantime 
her medical bills went to collection and she even got a letter 
that said she was going to jail. So now she is on the Medicaid 
expansion. She works part-time, she gets her treatment, and if 
we eliminate this expansion she now won't have insurance again.
    Mr. Chairman, those are the types of people who are getting 
health insurance now. I can't help but believe Lisa Scheim and 
all the other millions of people who are getting insurance are 
getting worse care now than no care before. I yield back.
    Mr. Burgess. The chair thanks the gentlelady. The 
gentlelady yields back. The chair recognizes the gentleman from 
Florida, Mr. Bilirakis, 5 minutes for questions.
    Mr. Bilirakis. Thank you, Mr. Chairman, I appreciate it and 
I thank the panel for their testimony.
    Mr. McCarthy, in your testimony you noted that giving 
priority to states with the biggest wait lists would only 
incentivize states to have high wait lists. I am from Florida 
and we are the number two when it comes to the size of our home 
and community based care waiting lists, and I understand Texas 
is number one. Right, Mr. Chairman?
    You also mentioned tying funds to the Money Follows the 
Person program. There are 44 states that have that program, 
Florida does not. How do you propose allocating funding to 
promote more home and community based care, something I 
strongly support, and yet not disadvantage states such as 
Florida and Texas that have a greater need?
    Mr. McCarthy. It has to do with how we provide that 
incentive. So the idea is like in Ohio--our Money Follows the 
Person program, when we started we had about 600 people that we 
moved out of institutions. By the time I left that number was 
over 5,000 people. So in 6 years we were able to do it. We 
focused on how to get people out of institutions, looking at 
that to pull people out.
    We also used the money that came to the state by the one 
percent increase for rebalancing, so we used that also. So my 
point of it was if you were to say that it only goes to the 
states with the highest wait lists, then in Ohio my incentive 
would be to let the wait list grow that I have so as to be able 
to access that that funding was 90/10 in the bill, so that 
would be my incentive to get there.
    So instead of doing that I was saying, how do you just tie 
it to programs that are out there and hopefully other states 
will be looking at what we have done in Ohio or other states 
and learning from that and that is where CMS can come in and do 
a better job of getting states to collaborate to figure those 
different pieces out to move forward in those areas.
    Mr. Bilirakis. Thank you. Again for Mr. McCarthy, Medicare 
is moving towards value-based payments. Some forward-thinking 
Medicaid directors of programs have been adopting this model 
while others have been much slower. Can you talk about why 
value-based purchasing is important and what some of the 
existing barriers are both regulatory and statutory that need 
to be removed? How can we promote, really, generally how can we 
promote innovation?
    Mr. McCarthy. So Ohio is a State Innovation Model grant 
winner and so that was a benefit to the state to move forward 
in that. And the reason value-based purchasing is important in 
Medicaid is because it rewards better health outcomes, it 
doesn't just put money into the program.
    So in Ohio for instance even in this last budget that was 
introduced Monday, there weren't just simply for physicians 
putting money into increases in fee-for-service physician 
rates. It was going into the per member per month amount going 
to doctors which then get rewarded for bringing down costs but 
having better outcomes.
    And so that is why value-based purchasing is important. The 
barriers that you run into are all at the CMS level. I have 
talked to CMS about this. The Center for Medicare and Medicaid 
Innovation don't talk to CHDS at the Medicaid side. And for 
instance in Ohio we ran into a barrier. The only way we could 
do patient-centered medical homes in the fee-for-service world 
was through a state plan and that meant then we had to bring up 
a PCCP program, which we didn't run in Ohio.
    So there is this whole barrier of how do we get there? 
Those things need to be waived, because what we were trying to 
do is bringing more value to the program and increasing 
outcomes.
    Mr. Bilirakis. Thank you very much. I yield back, Mr. 
Chairman.
    Mr. Burgess. The gentleman yields back. The chair thanks 
the gentleman. The chair now recognizes the gentleman from 
Oregon, Dr. Schrader, 5 minutes for questions, please.
    Mr. Schrader. Thank you, Mr. Chairman. I appreciate having 
the hearing, and some of these fixes to the Medicaid population 
issues and the Medicaid expansion issues I think are fine. I 
think unfortunately it doesn't get at the big gorilla in the 
room which is what do we do with the Medicaid expansion 
population and how do we deal with Medicaid going forward.
    And I apologize to Dr. Roy right off because I am going to 
ask you a few questions. When was study, the New England 
Journal of Medicine study done that cites some of the issues in 
the Oregon Medicaid program that you cite in your testimony?
    Mr. Roy. The study was conducted in the late 2000s and 
early 2010s, and I believe it was published in 2014.
    Mr. Schrader. Yes, so it predated the ACA.
    Mr. Roy. It wasn't about the ACA expansion, but it was 
about----
    Mr. Schrader. I understand, reclaiming my time. The 
problems you cite with outcomes, no better no worse, but no 
better than traditional Medicaid with the waiver program. 
Second question, do you think it is cheaper based on your 
information to give tax credits and subsidies for the federal 
government, for the federal taxpayer to do that rather than 
have eligible people be on Medicaid?
    Mr. Roy. In Transcending Obamacare, our health reform 
proposal, we propose taking the same dollars. So it is not 
about a reduction in dollars relative to the Medicaid program, 
but it is about taking the dollars that are spent, providing 
acute care coverage to the Medicaid population and giving them 
the option of having a tax credit that allows them to 
purchase----
    Mr. Schrader. Thank you, I appreciate that. And the answer 
is it is unfortunately to put people in the Medicaid population 
for the American taxpayer. I am trying to be a little fiscally 
responsible as we look at the costs of all these people. I 
prefer not to have to take care of people that are unable to 
afford health care, but on the back end I don't want to pay for 
them in the emergency room or for long-term, serious, life-
threatening issues at the end of their life.
    Mr. Roy. If you buy an East German car it might be cheaper 
than buying a Toyota or a Ford but that doesn't mean you get 
more transportation out of it in the end.
    Mr. Schrader. I totally agree.
    Mr. Roy. So cheaper isn't necessarily better.
    Mr. Schrader. I am a businessman. Spending money sometimes 
saves you money up front, right? So if you spend your money you 
can hopefully make it up on the back end. How many people do 
you think that are under 138 percent of poverty level or 
earning $16,000 a year are going to be able to afford to put 
money into an HSA account that you recommend in your proposal?
    Mr. Roy. If it is subsidized through these tax credits they 
would be able to afford it.
    Mr. Schrader. If it is subsidized. So in other words we 
need to have money in the Medicaid expansion population or 
whatever system we have to be able to make something go forward 
in a reasonable way that Joe Sixpack could actually afford 
things.
    Mr. Roy. Absolutely.
    Mr. Schrader. The issue I have here right now is that, you 
know, the bottom line is the Medicaid expansion population has 
been an unqualified success. We have red states, red state 
governors, some of my Senate colleagues, some of my Republican 
colleagues who cross the aisle, you know, really excited about 
the opportunity to serve people. That is really the goal, 
right? People, you don't want them not to have health care. You 
don't want them not to show up to work. You don't want them to 
be a burden to the taxpayer, and health care is kind of a 
central way to make that thing happen.
    I am very worried that the block grant math is 
unfortunately a death spiral. That has been talked about. It is 
a block grant. I don't care if it is a Medicaid expansion 
population, I don't care if it is Medicaid itself. I don't care 
if it is all these little bills that we are talking about that 
are supposed to fix, not repeal Medicaid or Medicaid expansion, 
you know, we need to make sure that these things are there at 
the end of the day. The block grant math doesn't do that.
    Population in America is going increase. By definition 20 
percent of Americans are on Medicaid, 25 percent in my 
district, 50 percent in the chairman's district are on 
Medicaid. You put that on a block grant with increasing 
population it is a death spiral not just for the individuals, 
not just for the families, but for the taxpayers of this 
country.
    Rural districts in particular benefit by the Medicaid 
expansion. In my district, in my state alone in rural parts of 
my district and the chairman's district, the coordinated care 
organizations are giving better care for less money. It doesn't 
always have to be this Hobbesian choice where you cut provider 
reimbursement. That is a medieval technology. That is a 
medieval technology, colleagues.
    What you want to do is incentivize with block grant global 
payments like we have talked about with the SGR, you know, to 
give these local districts, local control to the states to 
create their own way to provide Medicaid services to these 
people. In Oregon, contrary to that study that you cite in your 
testimony, it has been an unqualified success. You know, 
emergency room admissions are down 20, 30 percent; primary care 
visits up 60 percent. Diabetes, one of the studies they are 
doing and looked at, much better outcomes, almost 60 percent 
better outcome than we see before. And I could on with COPD, 
all these.
    If you give people the right incentives to get good health 
care, not burden them with financial burdens we can get this 
thing done. So I would urge my colleagues to think thoughtfully 
as we look at this Medicaid expansion issue going forward. And 
I yield back. Thank you, Mr. Chairman.
     Mr. Burgess. The chair thanks the gentleman; precisely why 
we are having the hearing. The chair recognizes the gentleman 
from Indiana, Dr. Bucshon, 5 minutes for questions, please.
    Mr. Bucshon. Thank you very much, Mr. Chairman. Indiana 
expanded under the Affordable Care Act under current Vice 
President Pence, so obviously, you know, a state based program 
like HIP 2.0 is a flexible program but required a difficult to 
acquire waiver.
    Mr. Roy, in House Republican health care proposal Better 
Way would allow states to use Medicaid to provide a defined 
contribution in the way of premium assistance or a limited 
benefit to work-capable adults who are working or preparing to 
work. States can do this now but require a waiver as in HIP 
2.0. This would allow states to use this approach without a 
waiver so they can enroll more low-income adults in private 
coverage if they are working.
    This is similar to the goals, as I mentioned, Healthy 
Indiana Plan 2.0 and in fact it is being implemented and I 
would like to explore this idea legislatively, so what are your 
thoughts on this type of policy reform?
    Mr. Roy. Thank you for the question. I think it is better 
than nothing to have more flexibility for states to do the 
kinds of things you are talking about. As I alluded to earlier 
in response to a different question though, the Medicaid 
statute severely limits the flexibility even if CMS grants 
waivers to states to do certain types of things with their 
Medicaid program.
    So what is very important is to reform the statute so that 
individuals have more control over their healthcare dollars, 
they can buy the kind of insurance that really serves their 
needs, deploy Health Savings Accounts sometimes for example to 
use retainer based direct primary care so they can get much 
bigger and much more frequent access to primary cares and 
specialists when they need them. If you do that it will 
dramatically improve health care outcomes relative to the 
Medicaid program today.
    Mr. Bucshon. Thank you. Mr. McCarthy, in your testimony you 
said the fundamental role of CMS should be rethought and we 
should focus less on command and control. There are nearly 400 
staff at CMS and CHIP--well, Centers for Medicaid and CHIP 
services at CMS. Do you know how many of them have worked in a 
state program for a health provider or a managed care plan?
    Mr. McCarthy. I do not know how many of them worked in----
    Mr. Bucshon. Well, I will give you the data. Using LinkedIn 
to look at publicly available information it was examined in 
2016 that about 40 percent of the staff had a bachelor's degree 
and nearly 15 percent had a law degree or Ph.D., but only 4 
percent held a credential as a health care provider. The 
majority of the staff, 57 percent of the staff had spent their 
career in Federal or state government, but only 5 percent had 
previously worked for a state Medicaid program or fewer than 20 
percent had ever worked for a health plan or provider.
    Of course none of this is to suggest that these aren't 
great employees and are doing the best that they can, but it 
does raise the question of whether or not there is an 
unintentional institutional bias for individuals who are 
writing the rules and regulations for state Medicaid programs 
if you only have 5 percent of the people that have ever 
actually worked for a state Medicaid program.
    What could be done to devolve CMCS authorities or assure 
there are more people at CMS that have more real-world 
experience in this area?
    Mr. McCarthy. One of the things that often comes up is the 
fact that CMCS treats the National Association of Medicaid 
Directors as just another stakeholder group. They are no 
different than a hospital association or anyone else.
    And so one of the things I have advocated for a long time 
is the Medicaid directors should be brought in earlier to talk 
about rules and regulations and what will work and not work. 
They should not be treated as just another stakeholder because 
they are part of the system that is putting up a bunch of the 
money, so they need to be talked about. For instance, the 
latest rules, the mega rule where you brought up that came up 
around the IMDs, Institutions for Mental Disease, in that final 
rule states cannot implement what was put in and that was 
because CMCS didn't talk to states specifically around how 
could this be implemented.
    So I don't know how to change getting people who work at 
CMCS to come from states because obviously they would have to 
move across the country there or you would just be some of my 
old staff from the district or Maryland would be the only two 
places that people would move there for. But the rules and 
regulations and how states are looked at have to be----
    Mr. Bucshon. So I think what at the end of the day, which 
we see this across federal agencies, federal agencies should 
reach out to people who have subject matter expertise probably 
in a better way than they have. Not necessarily have those 
people with that expertise in the agency, but they should 
probably reach out more to people like yourself and others.
    Ms. Solomon, do you believe that all citizens of the United 
States should be on Medicaid or on Medicare?
    Ms. Solomon. All citizens, no. I mean the ones that----
    Mr. Bucshon. Yes. That would be a single payer. Do you 
believe in a single payer?
    Ms. Solomon. I believe in universal coverage. I think what 
we did in----
    Mr. Bucshon. No, the answer is you do or you don't.
    Ms. Solomon. No, I don't believe in single payer. I believe 
in whatever gets us there.
    Mr. Bucshon. Yes.
    Ms. Solomon. And the ACA made a big start in that.
    Mr. Bucshon. Yes. OK, thank you. I yield back.
    Mr. Burgess. The chair thanks the gentleman. The gentleman 
yields back. The chair recognizes the gentleman from New York, 
Mr. Engel, 5 minutes for questions, please.
    Mr. Engel. Thank you, Mr. Chairman. We have heard 
Republicans describe their alternative picture of Medicaid 
before. In fact we have had a hearing on most of these bills 
before. I don't think anyone here would disagree with 
meaningful efforts to shrink waiting lists and afford Americans 
the services they need quickly, but that is not what these 
bills do. These bills represent yet another Republican attempt 
to gut Medicaid based on total falsehoods.
    I think it would be helpful to talk about the real 
Americans for whom Medicaid is lifesaving. First, let's clear 
up any misconceptions about who Medicaid covers. Nearly a 
quarter of New Yorkers were covered by Medicaid or CHIP in 
2015. The vast majority of New York's Medicaid beneficiaries 
come from working families. These Americans cannot afford 
private health insurance even with a full-time job. For them, 
Medicaid is a chance to stay healthy which means a chance to 
work longer hours and provide for their families.
    Now I would like to debunk another misconception. My 
friends on the other side of the aisle allege that Medicaid 
spending is out of control. In fact, Medicaid spending is lower 
than the spending growth rate of Medicare and private 
insurance, and again I will point to New York. Despite charges 
that Medicaid is inflexible, our state has dramatically 
revamped our program to improve program integrity, better care 
for patients and save money. These efforts have avoided costs 
to the Medicaid program in excess of $1.8 billion. New York 
achieved this while expanding Medicaid and cutting our 
uninsured rate in half.
    There is one more issue I would like to address and that is 
the one before us today. A Republican's ideas to strengthen 
Medicaid entail delaying or denying coverage to Americans that 
need it to redirect funds to other parts of the program, 
specifically to those states that choose to operate waiting 
lists for Medicaid home and community based services. They are 
suggesting that if states have high coverage levels they are 
also letting Americans suffer on waiting lists.
    Let me ask you this, Ms. Solomon. I am wondering if you can 
help us delve into that claim. You said in your testimony that 
11 states and D.C. do not operate waiting lists. I believe my 
state of New York is among them. Is that correct?
    Ms. Solomon. That is right.
    Mr. Engel. Thank you. As I said a minute ago, New York cut 
its uninsured rate in half, thanks in part to its decision to 
expand Medicaid. Now even with that major expansion of coverage 
zero New Yorkers, nobody, was forced onto a waiting list. So 
Ms. Solomon, let me ask you again. Would you say that New 
York's example is representative of most states without waiting 
lists?
    Ms. Solomon. It is. As I said, only two of the states 
without waiting lists have not expanded, so there isn't a 
correlation there.
    Mr. Engel. Thank you. And I have one final question for 
you, Ms. Solomon. Is there any evidence that refusing or 
holding up Americans' Medicaid coverage as these bills would 
do, would reduce waiting lists for home and community based 
services?
    Ms. Solomon. I don't think they would because these are all 
state choices. States have made a choice whether or not to 
lower their waiting lists to provide more services to take up 
options. It is all state choices. It is not necessarily because 
another state has done something for other people.
    Mr. Engel. Thank you very much. Let me say that if as this 
hearing title suggests my Republican friends are serious about 
strengthening Medicaid, and I quoted this is what this about, 
``Strengthening Medicaid and Prioritizing the Most 
Vulnerable,'' well, let me suggest there is a way to do that. 
The Affordable Care Act strengthened Medicaid tremendously by 
modernizing it and promoting program integrity. The ACA also 
helped America's most vulnerable. Thanks just to the law's 
Medicaid expansion, more than 12 million people gained 
insurance coverage.
    So in short, let me say this. If you want to strengthen 
Medicaid, if you really want to strengthen Medicaid, strengthen 
the Affordable Care Act. Thank you, Mr. Chairman. I yield back 
the balance of my time.
    Mr. Burgess. The chair thanks the gentleman. The gentleman 
yields back. The chair recognizes the gentlelady from Indiana, 
Mrs. Brooks, 5 minutes for questions, please.
    Mrs. Brooks. Thank you, Mr. Chairman. I would actually like 
to talk about something that we have done in Indiana that my 
colleague from Indiana has talked about which I do believe will 
strengthen Medicaid, and that is Healthy Indiana Plan 2.0, 
which I might say the logo is health coverage equal peace of 
mind.
    So we in Indiana do believe that health coverage equals 
peace of mind. And the Healthy Indiana Plan which was approved 
by our General Assembly prior to the Affordable Care Act being 
implemented had incredible difficulties with CMS getting 
waivers during the time that it has been in existence, and our 
new governor, Governor Holcomb, just resubmitted Healthy 
Indiana Plan 2.0 with some modifications just yesterday. And I 
have to just share some of the year one results, and this 
comes, some of this information comes from analysis of 2015 
member surveys.
    There are over 370,000 members approved for coverage. 
Seventy percent of the members choose to make contributions 
into their POWER accounts, and we could go into more. Forty two 
percent emergency room visits lower, 42 percent emergency room 
visits are lower for individuals that have moved from 
traditional Medicaid into Healthy Indiana Plan. Eighty percent 
HIP plus members report satisfaction, so do providers. Three 
and four providers, and we started out the hearing talking 
about providers, believe HIP will improve health care in 
Indiana. And there is a gateway to work in trying to 
incentivize for the expansion population more and more people 
to seek work opportunities and to get them training.
    So I would like to just focus a little bit on what your 
thoughts are about Healthy Indiana Plan 2.0, each of you, what 
do you think are the best things, and maybe a challenge very 
briefly in my 3 minutes, about what you know about Indiana's 
innovative, the first consumer-directed health care program in 
the country for the Medicaid population.
    Dr. Roy.
    Mr. Roy. So in my view the Healthy Indiana program and in 
particularly the initial version that was passed under Governor 
Mitch Daniels is the most innovative Medicaid program in the 
country. And I think it is very encouraging that Seema Verma 
who was one of the chief implementers of that plan has been 
nominated by the President to be the CMS administrator.
    I think one thing we should mention about the Healthy 
Indiana Plan 2.0 is that under the Obama administration CMS 
there was lot of pushback on some of the important features of 
Healthy Indiana that made Healthy Indiana so attractive. So, 
for example, in the POWER accounts that Healthy Indiana, the 
program has, the Health Savings Account-like instruments in the 
Healthy Indiana program, there were certain requirements. To be 
eligible for the Medicaid expansion under HIP 1.0 you had to do 
very small things, provide a small premium payment of like a 
dollar in some cases.
    Mrs. Brooks. A dollar a month.
    Mr. Roy. Exactly, a dollar a month. Do some basic annual 
checkup tests like checking your cholesterol, checking your 
diabetes, your HbA1c, other basic checkups to make sure that 
you were engaging in the primary care and wellness health 
activities that would help people manage their care in a really 
good way.
    A lot of those requirements were watered down in Healthy 
Indiana Plan 2.0 because the ACA Medicaid expansion is 
mandatory and so there isn't the same carrot opportunity to 
say, look, if you do these things we will give you the reward 
of expanded access to coverage under HIP 2.0 the way it was for 
HIP 1.0. So that is one of the very disappointing aspects of 
how the Obama administration----
    Mrs. Brooks. Thank you. And Dr. Roy, because I would like 
to get Mr. McCarthy because my time is running out, I would 
appreciate it if you would supplement your testimony with other 
responses if you might.
    Mr. McCarthy.
    Mr. McCarthy. I agree with what Dr. Roy said. It is really 
important to say that it was the pre-ACA versus post-ACA. And I 
would also point out that in Ohio under our Healthy Ohio 
program that we had with something similar we also hired Seema 
Verma to help us write that waiver. And that was called Health 
Savings Account, but we called it a BRIDGE account so that a 
person could take the money that was in that account with them 
when they moved off of Medicaid to help them pay for health 
care services when they weren't on Medicaid any longer.
    Mrs. Brooks. Can you please quickly explain your concept? 
You mentioned in your written testimony about money following 
the person approach. Could you briefly touch on what that 
means?
    Mr. McCarthy. Yes. So that is where people who are in home 
and community, well, basically people who are in institutions 
so they are institutionalized. And what you are doing is trying 
to get the person out of the institution back into the 
community and the issue is often that person doesn't have the 
money to do some of the very basic things and that is where 
Money Follows the Person works, like buy people pots and pans 
and help on the first month's rent.
    The idea there was to use those dollars that would be 
available to then also pay for home and community based 
services for a year or 2.
    Mrs. Brooks. Thank you. I am sorry, my time is up. I yield 
back.
    Mr. Burgess. The chair thanks the gentlelady. The chair 
recognizes the gentleman from Georgia, Mr. Carter, 5 minutes 
for questions, please.
    Mr. Carter. Thank you, Mr. Chairman, and thank all of you 
for being here. This has been a very informative session today 
and I appreciate all of your input.
    Dr. Roy, I want to start with you. First of all, I want to 
thank you. Today you have articulated the fact that Medicaid 
spending is climbing and that unfortunately the health outcomes 
in Medicaid are not what they should be and they are far worse 
than many other programs. So it seems like we are at an 
impasse. And my question is, all of us want to improve care and 
we want to decrease costs and cut costs and decrease spending 
but, and we are looking for ways that we can do that and 
certainly the bills that have been presented here today that we 
are discussing will do that and we are thankful for that.
    But what are some other solutions very quickly that you 
envision that perhaps could help us in this goal?
    Mr. Roy. Absolutely. Thank you for the question. I think 
the most important thing is to maximize the flexibility that 
individuals have and also states and localities to take the 
health care dollars and the financial systems that we are 
offering so that individuals can buy the health coverage and 
health care that they need.
    The biggest problem with the Medicaid program and the 
reason why it doesn't work is not because we don't spend enough 
money or we spend too much money, it is because there is very 
little flexibility in how those dollars can be spent. And so a 
lot of the dollars have to be spent in massively inefficient 
ways that prevent people from getting the care that they need.
    Mr. Carter. Where does personal responsibility come in and 
how do you legislate that? I mean it is difficult.
    Mr. Roy. Well, I think when individuals are controlling 
more of those health care dollars they are naturally going to 
be much more responsible for their coverage and care, because 
they know that if they manage those dollars wisely they are 
going to have savings later on in a POWER account or something 
like that that cannot only accrue to their future health care 
needs but those of their children, their spouses, their 
descendants, the caregiver, the people they have to take care 
of.
    So that is an important aspect of when you take the dollars 
out of the bureaucracy and give it to patients to control 
themselves; surely we can all agree that the more the patient 
controls the dollar the better that patient is.
    Mr. Carter. Absolutely. Thank you for that. And I am going 
to stay with you, Dr. Roy, and I am going to ask you one more. 
In your written testimony you discussed the 2010 Simpson-Bowles 
report, and that of course took on the issue of creative 
financing and noted that many states finance a portion of their 
Medicaid spending by actually taxing the providers. We did this 
in the state of Georgia. I was in the state legislature for 10 
years and we actually, I was on the Appropriations Health 
Subcommittee, I was on Health and Human Services, so I was 
right in the thick of it.
    And we actually drew down, we were drawing down more 
federal dollars from Medicaid at a 1:2 ratio. In other words 
for every dollar we would put in we were getting two. Well, 
obviously we balanced our budget that way, and in fact the 
state of Georgia this year is reauthorizing that in this 
legislative session. How can we do this better? That just 
doesn't make much sense to me.
    Mr. Roy. Thank you again for this question. What we propose 
in Transcending Obamacare, and it is an idea that we actually 
borrowed from the Urban Institute and a scholar there named 
John Holahan, a left of center think tank, is that the best way 
perhaps to reform the Medicaid program broadly is to 
restructure it so that instead of having both states and 
Washington offload these costs onto each other and split the 
responsibility in ways that don't work, have the states and 
Washington divide the responsibilities up.
    So for example what we propose is have the federal 
government say we are going to take over the part of Medicaid 
that is providing financial assistance to poor people who need 
acute care health insurance, just like we do for tax credits 
for the uninsured, et cetera, and then the long-term care, 
trade that and give that fully to the states to manage. If you 
do it that way, if you clean up the lines of responsibility--
states control one aspect, federal government supports the 
other--you eliminate all these poor and bad incentives for 
mismanagement.
    Mr. Carter. OK. Mr. McCarthy, I have got about a minute and 
there is something that is very important to me. In your 
testimony you said that states are forced to cover all FDA-
approved drugs and in turn receive rebates. However, for new 
high cost drugs the rebate is not high enough to offset the 
large increases in expenditures. Would we not be better off 
letting the states opt out of the rebate program and do it 
themselves?
    I will be quite honest with you we used to do it ourselves 
in Georgia. We used to have our own rebate system before this 
started with the federal government. Dr. Bucshon can certainly 
attest to the fact that in the South we are in the Cardiac 
Belt. We utilize more of a certain type of drugs than they do 
in other parts of the country. Dr. Murphy mentioned the anti-
psychotics, and of course as a pharmacist I understand all 
this. And how do you think that idea would go if we let the 
states do their own rebate program?
    Mr. McCarthy. As always if you let states have that option 
and don't force them to do something I would be in support of 
that because right now you can only negotiate on additional 
rebates.
    Mr. Carter. Good. OK, well, I am out of time, but thank all 
of you again for this.
    Mr. Burgess. The gentleman yields back. The chair thanks 
the gentleman. The chair now recognizes the gentleman from 
California, Dr. Ruiz, for 5 minutes for questions, please.
    Mr. Ruiz. Thank you, Mr. Chairman. Thank you, panelists, 
for being here. I am not on this subcommittee, but I am still 
here because this issue is so very important to me personally, 
my patients, and my constituents. I am an emergency physician 
and there is just so much to say about this conversation.
    First, all doctors, Republican or Democratic doctors prefer 
health insured patients over uninsured patients. There is no 
doctor on this committee or anywhere in our nation that prefer 
their patients to be uninsured. Two, Medicaid patients have 
higher morbidity because they are a higher risk group. They are 
the sick, vulnerable, and poor. That means that actually 
Medicaid is working because we are targeting those patients 
that it is intended to target.
    Three, block grant and per capita block grants will create 
more uninsured patients and physician reimbursement rates will 
worsen because states will choose to cut eligibility, reduce 
insured patients, and cut reimbursement rates to physicians. 
Tax credits will not cover the full cost of health care, in 
fact it will have our vulnerable populations pay higher 
premiums and deductibles and therefore patients will have to 
pay more out-of-pocket.
    Since the expansion of Medicaid under the Affordable Care 
Act, emergency departments around the nation including mine 
have seen a dramatic decrease in uninsured patients by 50 
percent or more. That is good for the patient. That is good for 
the emergency department and that is good for hospitals and 
taxpayers. And the reason why emergency departments have seen 
an increase in patients is because there is not enough 
physicians to see the newly insured. The over 20 million newly 
insured patients in our nation now have insurance.
    So these patients who have been putting off taking care of 
their chronic illness because they couldn't see a doctor 
because they couldn't afford it are now insured and they can't 
see physicians in their community because of the severe 
physician shortage crisis so they go to the emergency 
department.
    OK. I have concerns that the Verify Eligibility Coverage 
Act will hurt American citizens. This bill will prohibit 
federal funds until citizenship is proven. So let me give you a 
real-life case of a citizen that this bill will hurt. At the 
Mass General Hospital where I was training in medical school I 
took care of a patient that arrived in the emergency department 
after a severe motorcycle accident and suffered severe multi-
organ trauma including completely degloving of his face.
    He was in the trauma ICU for 2 months without any 
identification of who that person was. He couldn't speak, he 
was intubated, and there was no information about him and 
nobody, no family was calling in to look for him. so we simply 
didn't know who he was. What do we do with them? What do we do 
with that citizen? Are we not allowed to pay for his care 
because he couldn't prove his citizenship?
    So in regards to the lump sums and lottery winning 
legislation, Ms. Solomon, while I think it is safe to say that 
an overwhelming amount of millionaires aren't trying to qualify 
for Medicaid, I would like to clarify the impact of this 
legislation. It should be noted that this bill has changed 
since last Congress and reflects some additional nuances and 
protections that are very important.
    This legislation is a prime example of why it is so 
critical that we slow down and take the time needed to truly 
consider a policy proposal and its impact on lives of millions 
of Americans. So is there any evidence that this bill actually 
solves a rampant problem?
    Ms. Solomon. Thank you, Dr. Ruiz. This bill has changed 
considerably and I commend the drafters for filling in a lot of 
the problems that were identified initially, and now I think 
what it really will do is very modest and just create hassles 
for states.
    It is really interesting to look at what has happened in 
Michigan which actually is recovering from lottery. In their 
Medicaid waiver they were given permission and over the 21 
months that this provision has been live they have recovered 
$380, but they have a contractor that needs to track so it is 
not clear it does much of anything.
    Mr. Ruiz. Let me ask you another question regarding tax 
credits. Can you explain why tax credits don't work in place of 
Medicaid coverage?
    Ms. Solomon. Especially these tax credits that are being 
proposed that are flat and not based on income would clearly 
not work. But the other thing that we need to remember is that 
Medicaid is a very different program than private insurance 
that is specifically designed and very flexible to cover the 
multiple populations that are served. A tax credit isn't going 
to have that same flexibility that Medicaid has to provide the 
kinds of substance use treatment, behavioral health treatment, 
programs for kids with special needs; it just isn't going to 
work.
    Mr. Ruiz. Thank you.
    Mr. Burgess. The chair thanks the gentleman. The gentleman 
yields back. The chair recognizes the gentleman from Maryland, 
Mr. Sarbanes, 5 minutes for questions, please.
    Mr. Sarbanes. Thank you, Mr. Chairman, I appreciate it. I 
want to thank the panel for its testimony.
    And Ms. Solomon, I wanted to ask you a question, but I also 
wanted before that just to say that it is unfortunate that our 
Republican colleagues seem to want to take parts of the 
Medicaid program that really do represent innovation and 
flexibility and then instead of identifying that as a real 
opportunity to build on a strong foundation in the overall 
program, they use it to distract from good parts of the program 
or actually go pull money away from that foundation.
    So you talk about the home- and community-based waiver 
program which is a terrific innovation, I think. When I was 
still in the health care arena representing a lot of health 
care clients in Maryland, we were looking at a waiver program 
that would allow some Medicaid funding to flow to assisted 
living facilities where there is a lower need for care and less 
costly, but didn't usually qualify for Medicaid reimbursement.
    So we wanted to explore that as an alternative to nursing 
home care which is very high cost, the home- and community-
based care waiver is an extension of that thinking and so we 
ought to pursue it in a meaningful way, but we shouldn't just 
then use it as a shiny object to be able to then argue that we 
should go take money from other important parts of the program.
    In the same way the idea of flexibility is an important 
one. I think you do want to give state Medicaid programs 
flexibility to innovate and try other things, but then using 
the flexibility argument that our colleagues on the other side 
say, OK, that is why we should block-grant things because that 
is the ultimate flexibility, so again they go take a concept 
that could be a constructive one and they use it to advance 
something which has the effect of undermining the core strength 
of the Medicaid program. And I think it is unfortunate. It is a 
missed opportunity for us to talk about how we can continue to 
strengthen and improve a program that works pretty well 
already.
    So I would like you to maybe speak to that idea of how you 
keep the foundation of the program strong even as you are 
looking at potential for innovation and flexibility. And in 
fact that if you did maintain the strength of the program and 
gauge states' flexibility, they would actually go identify 
sources of savings and you would probably achieve more savings 
than as what is being proposed by these three bills to take 
away from the existing beneficiaries.
    So if you could speak to that because I think it is 
important if we want to get a more efficient program that 
provides solid care and maintains a strong foundation that is 
the way flexibility and innovation ought to be pursued.
    Ms. Solomon. I totally agree with that. And we have been 
actually cataloguing on our Web site examples of states doing 
exactly that and they have been given tremendous flexibility to 
innovate, including being able to use upfront dollars which 
often are necessary to build the communication system across 
providers, to increase provider capacity and then achieve the 
savings in the long run.
    When I worked in Medicaid at the state level that was 
always the barrier, because as an advocate we would argue but 
you would be able to save money if you make this investment. 
And the money wasn't there. And if you look at the innovation 
through the SIM grants that Mr. McCarthy spoke of and other 
initiatives that have taken place that is exactly what has been 
going on.
    And I really take issue with Dr. Roy's statement that 
Medicaid doesn't work. Medicaid works really well. And I think 
that is really the thing that we are trying to lift up through 
highlighting these innovative programs, targeting the high 
utilizers that are responsible for a great portion of the costs 
by providing better coordination with some of the alternative 
models that have been put forth in the Affordable Care Act and 
elsewhere. So I think we could go on for all day on how 
Medicaid works.
    Mr. Sarbanes. Thank you for your testimony. I yield back.
    Mr. Burgess. The chair thanks the gentleman. The gentleman 
yields back. The chair recognizes the gentleman from 
California, Mr. Cardenas, 5 minutes for questions, please.
    Mr. Cardenas. Thank you very much, Mr. Chairman. Don't let 
these people distract you from the big picture, ladies and 
gentlemen. They keep talking about less than six----
    Mr. Bucshon. Would the gentleman yield?
    Mr. Cardenas. Yes.
    Mr. Bucshon. We are not these people, we are elected 
members of Congress that represent over 700,000 citizens.
    Mr. Cardenas. Would you please give me back my time, Mr. 
Chairman? Thank you very much. Don't let these elected Congress 
members distract you from the big picture. They keep talking 
about less than 6,000 people. The big picture is the more than 
74 million Americans today that have a life of dignity because 
they are using Medicaid and Medicare, 74 million, ladies and 
gentlemen, right now in the United States of America. Six 
thousand, let's deal with that.
    Let me be very clear here, ladies and gentlemen, for the 
majority of Americans, middle class Americans, Medicaid is what 
gets you or your mother or your father into a nursing home. It 
is what allows you to have a nurse help you in your home with 
things you otherwise need to live a basic life of dignity. It 
is not Medicare, ladies and gentlemen. It is Medicaid that 
provides that. Medicare doesn't even get you through the door.
    Seniors, families with seniors who need help cooking, 
walking or even changing their clothes, I want you to be very 
clear about this. We are talking about you, ladies and 
gentlemen, we are talking about your loved ones. This is 
important here. Your long-term care doesn't come through 
Medicare. It comes through Medicaid. Many people don't 
understand the program. They want to demonize it to basically 
rip it out of your hands.
    But Republican and Democratic governors are begging 
Republicans here in Washington, please don't do this Congress 
members, because if Republicans in Congress do, these governors 
know that their state, the people in their state are going to 
suffer. Governors are going to have to decide what to cut from 
your life. Ladies and gentlemen, they are going to turn their 
backs on Grandma and Grandpa and we are going to have sick 
people in the streets more than there are today and we will be 
right back where we were, and that is not the good old days, 
folks.
    Today people on Medicaid walk into the doctor's office. If 
Republicans make these changes, people will be flooding 
emergency rooms. That will increase health care costs for 
everyone. Doctors and nurses and hospitals won't be able to 
handle the workload.
    Now according to the study in the New England Journal of 
Medicine, one of the oldest and most prestigious medical 
journals, if Republicans take away everyone's coverage over 
43,000 people could die each year based on these actions. In 
California that means over 7,600 people could die in 1 year. In 
Texas that is over 2,400 people a year. I am sure my colleague 
chairman of the Health Subcommittee understands the value in 
saving lives and doing no harm. In Illinois that is over 1,400 
people a year. I am sure my colleagues from Illinois think that 
is unacceptable. In Oregon that is over 1,200 people a year. I 
am sure the chairman of the committee doesn't want to see 
Medicaid dollars get slashed in his state.
    We cannot accept this. We cannot allow Republicans to do 
this to seniors, to children and to the people with 
disabilities. These are hardworking Americans. Republicans in 
Congress want to take that care away, but they won't own up to 
it. Republicans say to you that they don't want to pay for 
Medicaid. What they don't want you to figure out is that they 
want to pocket your tax dollars. They are going to cut Medicaid 
while lowering taxes for the wealthiest people. They are going 
to lower taxes for Trump's billionaire friends, and in the 
committee down the hall, but raise taxes on everyone else. It 
is not fair. It is just another trade-off, and Republicans are 
sabotaging the American health care system.
    Ms. Solomon, people in L.A. County where I am from have 
truly benefited from the Affordable Care Act. I have seen it 
with my own eyes. Can you talk a little bit about what 
repealing the law and what kicking people off of Medicaid would 
mean for people in Los Angeles?
    Ms. Solomon. I think you probably have as many people as 
many states do in your county. I have had the opportunity to 
meet the people from the community health centers across L.A. 
County. I think large numbers would just lose coverage as they 
would in every state, hospital uncompensated care would grow, 
same for other providers, and as you noted there would be real 
harm.
    Mr. Cardenas. Thank you very much, my congressional 
colleagues. I yield back.
    Mr. Burgess. The gentleman's time has expired. The 
gentleman yields back. Seeing that there are no further members 
wishing to ask questions, I do want to thank our witnesses for 
being here today.
    The chairman would remind the committee that we all agree 
it is important that we secure the care and keep our commitment 
to vulnerable Americans. The very fact that we are holding this 
hearing today as the first Subcommittee of Health hearing, I 
think, is evidence of that fact and I hope we can continue to 
take these steps and have the discussion in a rational manner.
    Pursuant to committee rules, I remind members they have 10 
business days to submit additional questions for the record. I 
ask the witnesses to submit their response within 10 business 
days on the receipt of these questions, and without objection, 
the subcommittee is adjourned.
    Mr. Green. Can you yield just for a second?
    Mr. Burgess. One second.
    Mr. Green. OK.
    Mr. Burgess. Time is up.
    Mr. Green. Mr. Chairman, I think on our side we want to 
work with you and I will leave this, I think a start of a good 
hearing. So we will go from here and to see what we can do.
    Mr. Burgess. Well, again, Mr. Chairman, the very fact that 
this was the first hearing of the subcommittee, I mean I know 
there are members on my side who actually resent the tone that 
this committee ended up on today. I regret that fact. I hope 
that we can keep this on a civil and unemotional level going 
forward. This is important work that we do and it is literally 
the future of our country.
    Again I want to thank our witnesses for being here today, 
and without objection, the subcommittee is adjourned.
    [Whereupon, at 12:43 p.m., the Subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
    
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