[Congressional Record (Bound Edition), Volume 155 (2009), Part 17]
[Senate]
[Pages 23373-23381]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           HEALTH CARE REFORM

  Mr. ALEXANDER. Madam President, the Senator from Georgia and I wish 
to talk a little bit today about the health care plans coming through. 
Fundamentally, our position is that we do not want to see another 
Washington takeover. We are deeply concerned about the cuts in Medicare 
that will affect seniors, about the taxes--both the increase in Federal 
taxes and State taxes, which we will talk more about--about the 
trillion dollars in new spending, and about the threats to the health 
care choices the legislation coming through would pose.
  Instead of such a large enterprise as what I have just described, we 
would propose that we take practical, small steps to reducing costs 
such as allowing small businesses to pool their resources, reducing 
junk lawsuits against doctors, allowing consumers to purchase across 
State lines, and creating health insurance exchanges. There are other 
steps that could be taken; in other words, instead of scaring the 
country half to death with new taxes and Washington takeovers and 
threatening their health care choices, let's don't throw the whole 
system out. Let's take practical steps to reduce costs and to improve 
services.
  Today we wish to specifically talk more about two government-run 
programs that already exist. One is Medicaid, which is the program for 
low-income Americans that today serves about 59 million Americans. 
About 60 percent is paid for by the Federal Government and about 40 
percent by the States. The second is Medicare, which seniors know very 
well because about 40 million American seniors are dependent upon 
Medicare. We are concerned because the proposals coming through the 
Senate Finance Committee would shift costs of Medicaid to the States, 
causing State budgets to be put in ruin, according to the Governors of 
those States, and either taxes go up or services are cut. We are 
concerned because the President and others have said we are going to 
pay for this big new program by savings in Medicare, not to be put in 
Medicare for seniors, but for the new program.
  A lot of people say it is hard to find opportunities for 
bipartisanship when we talk about health care, but I think I have found 
one. I am on the Senate

[[Page 23374]]

floor today to say I would like to be a cosponsor of the Reid 
amendment, the proposal by the majority leader of the Senate--the 
respected Harry Reid from Nevada. The New York Times reported yesterday 
that the majority leader had heard from his Governor and from other 
people in his State, and he was deeply concerned about the legislation 
that is coming through because it would increase costs in Nevada.
  In fact, I have a copy of the letter from the Governor of Nevada to 
majority leader Harry Reid, and it says: As you know, like the U.S. 
Constitution, most State constitutions require a balanced budget, 
including Nevada. Nevada will spend $907 million for programs on 
Medicaid. This is about 14 percent of our budget. We can't afford more 
taxes. Revenues are down.
  So the majority leader did exactly what I think a Senator would do. 
He introduced an amendment, or proposed an amendment, to the Senate 
Finance Committee and said: Take care of Nevada. If the Federal 
Government is going to expand coverage for Medicaid, then the Federal 
Government ought to pay for it.
  That is exactly what I believe. That is exactly the opinion of all of 
the Governors. The National Governors Association, of which I used to 
be chairman, has said to us: If you are going to expand Medicaid, if 
that is your big idea in Washington, then pay for it.
  Nothing irritates Governors and legislators more than Washington 
politicians who come up with big ideas, announce them, take credit for 
them, and then send the bill to the Governor and the legislature. I was 
a Governor. The Senator from Georgia was in the Georgia Legislature for 
17 years. He was the leader of the Republicans in the senate for 8 
years. He knows a good deal about State budgets and about the Medicaid 
Program and how it is an integral part and a very difficult problem for 
State governments.
  I am wondering if the Senator from Georgia thinks there might be 
opportunity for more bipartisan support for Senator Reid's amendment to 
have the Federal Government pay for 100 percent of Medicaid costs if 
Medicaid is expanded.
  Mr. ISAKSON. Well, I think the majority leader is exactly right. 
There is a prime example of what happens when the Federal Government 
mandates a benefit or a program and doesn't pay for it; the States end 
up having to do it. Just take No Child Left Behind or take the 
Elementary and Secondary Education Act, and IDEA. Back in 1978 we 
mandated funds to be appropriated for individuals with disabilities in 
America. In fact, we mandated States spend 40 percent per FTE more on a 
special needs child than on a regular child. We never sent them a dime 
for about 20 years. We finally, in 1999, started paying part of that 40 
percent. Now we are only paying half of it.
  So now we take Medicaid. Medicaid is a program, for the people out 
there who are listening today, where the States pay about one-third of 
Medicaid and the Federal Government pays about two-thirds. It changes a 
little bit, but that is about right. The State runs the program; the 
Federal Government mandates the program.
  When I was first elected to the Georgia Legislature, the expenses for 
Medicaid the year I was elected in the State budget were $20 million, 
State funds. That was 1 percent of the State's $2 billion budget. Now, 
today, this year, even with all of the cuts that have taken place, 
Medicaid is 12 percent of Georgia's budget. So it has grown from 1 
percent of the budget to 12 percent of the budget in about 30 years.
  Plans in the health care bill that are being talked about in the 
Finance Committee and that have been talked about in the House would 
mandate an increase of 150 percent--from 100 percent of poverty to 150 
percent of poverty for Medicaid eligibility. It is said the States will 
be held harmless until 2013 or 2014 but no promises after that.
  Let me tell my colleague what would happen to my State of Georgia if 
we raised mandatory eligibility to 150 percent of poverty and the State 
paid its third of that one-third, two-thirds matched by the Federal 
Government. It would raise Georgia's Medicaid budget expenses annually 
from 12 percent of our budget to 20 percent of our budget, $3.32 
billion. States can't afford to do that.
  As the Governor of Nevada said, 43 of our States can't deficit spend; 
43 percent of our States must balance their budgets. Medicaid has been 
carved on and worked on as it is to try and preserve it under the 
existing law. With a 150-percent increase in eligibility and no funds 
from the Federal Government guaranteed, the States would be put in a 
position of spending one penny out of every five on Medicaid, which is 
about 12 percent of my State's population. That is disproportionate and 
it is not fair.
  I think Senator Reid is exactly right. Our States should be held 
harmless on any mandated increases in Medicaid.
  Mr. ALEXANDER. Mr. President, going back to the Senator's point, the 
thing I think about, those of us who have been a Governor or in the 
legislature--in fact, I have said to some of my colleagues many times 
that if we expand Medicaid for low-income Americans--which States have 
to pay a third or more of--without paying for it, that we Senators 
ought to be sentenced to go home and serve as Governor for 8 years to 
see what it is like. I mean that because I can remember as Governor for 
8 years balancing budgets, first I would come up with the money for 
kindergarten through the 12th grade--that was a pretty set amount--then 
for the highways, and then for the prisons, and I would get down toward 
the end and there would be a certain amount of money left to either go 
into higher education or it would go for increasing Medicaid costs. 
Almost always that was the choice. If I put it into Medicaid, I had to 
take it out of education, and that would keep the University of 
Tennessee or Georgia or the community colleges from getting better.
  Guess what happens when the State can't put the money in. The tuition 
rates go up.
  Mr. ISAKSON. It is interesting the Senator talked about that. By the 
way, his experience as Governor was a great experience for Tennessee, 
and the Senator's leadership in education was phenomenal. But already 
with the restricted economy we have today and the recession in my 
State, our teachers this year are having to take a minimum of 3, and at 
the university system a maximum of 6, furlough days without pay just to 
try and meet the balanced budget. Part of that is the pressure of 
Medicaid, which is an entitlement. We cannot decide to just not pay 
Medicaid, we have to do it. It is a Federal law; the State has to run 
it.
  What the States are having to do this year--my State of Georgia and I 
think the State of Tennessee has probably experienced some of the same 
thing--they are having to cut back on other programs in order to still 
manage Medicaid.
  In a State, when they say ``other programs,'' they are talking first 
and foremost about education. In Georgia, 54 percent of the budget is 
the university system and elementary and secondary education, one out 
of every two cents. Well, if they can't cut Medicaid because it is an 
entitlement, then they have to cut education first and foremost, which 
is the most important function of State government. So the unintended 
consequences of such a mandate are going to be devastating. They only 
have two choices: to continue to cut education or to raise taxes. 
Neither one of those are a good choice.
  Mr. ALEXANDER. There is an article in the New York Times today which 
I ask unanimous consent to have printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                [From the New York Times, Oct. 1, 2009]

        Rate of Enrollment in Medicaid Rose Rapidly, Report Says

                            (By Kevin Sack)

       The recession is driving up enrollment in Medicaid at 
     higher than expected rates, threatening gargantuan state 
     budget gaps even as Congress and the White House seek to 
     expand the government health insurance program for the poor 
     and disabled, according to a survey released Wednesday.
       The annual survey of state Medicaid directors, conducted 
     for the Kaiser Family Foundation's Commission on Medicaid and 
     the

[[Page 23375]]

     Uninsured, found that the program had been spared the worst 
     effects of massive state budget shortfalls because of federal 
     aid in the stimulus package. But it also revealed grave 
     concerns about what will happen when that relief dries up at 
     the close of 2010.
       As unemployment surged, enrollment in state Medicaid 
     programs grew by an average of 5.4 percent in the previous 
     fiscal year, the highest rate in six years, according to the 
     Kaiser survey. In eight states, the growth exceeded 10 
     percent.
       Last year's average growth was well above the 3.6 percent 
     that had been forecast by the Medicaid directors a year 
     earlier. In this year's survey, the directors projected that 
     enrollment would continue to accelerate in the current 2010 
     fiscal year, growing by 6.6 percent.
       The states and the federal government share the $333 
     billion annual cost of Medicaid, which insured 62 million 
     low-income and disabled people at some point in 2007. It is 
     the states, however, that regulate that spending by setting 
     eligibility cutoffs, benefit levels and provider payments, 
     within federal guidelines.
       The Kaiser survey found that the growth in Medicaid 
     spending in 2009, at 7.9 percent, was the highest in five 
     years. That number also may increase this fiscal year. Three-
     fourths of the agency directors said they already fear their 
     appropriations will not be enough and that lawmakers will 
     have to find more money or, more likely, cut benefits or 
     provider payments.
       One such state is Nevada. ``We're seeing the trajectories 
     of our enrollment growth as well as our revenues all going in 
     the wrong direction,'' said Charles Duarte, administrator of 
     the state's Division of Health Care Financing and Policy.
       Medicaid is, by definition, a countercyclical program. 
     Demand for it is always highest at the time that states can 
     least afford it because of slumping tax revenues.
       The highest spikes in Medicaid enrollment often trail the 
     worst recessionary indicators. It was not until a year after 
     the 2001 recession that the growth in Medicaid enrollments 
     peaked at 9.3 percent.
       Vernon K. Smith, who directed the survey for Health 
     Management Associates of Lansing, Mich., said he doubted that 
     enrollment growth would reach that level as a result of this 
     recession, but that it was not out of the question. 
     ``Significantly many states said the pace of growth 
     accelerated as the year went on,'' he said.
       Some states did cut certain Medicaid benefits last year, 
     and two-thirds of them either froze or reduced payments to 
     providers. Those payments are typically the lowest made by 
     any insurer--often falling below actual costs--and as a 
     result some physicians decline to accept patients with 
     Medicaid.
       Nonetheless, state budgets were buffered from even worse 
     pain by the federal stimulus package enacted in February. The 
     largest single component of state aid in the package, worth 
     about $87 billion, provided a temporary increase in federal 
     Medicaid reimbursement to the states.
       The survey found that 38 states used the money to avoid or 
     reduce cuts in provider payments and that 36 avoided benefit 
     cuts. Because the federal money was conditional on states not 
     reducing eligibility for Medicaid, 14 states reversed 
     previously enacted restrictions and five abandoned plans to 
     tighten coverage.
       But state officials are already panicking about how to 
     compensate when the spike in federal matching funds expires 
     at the end of 2010. Few anticipate any significant reduction 
     in their Medicaid rolls by then.
       ``Many states believe they may be pressured to consider 
     previously unthinkable eligibility and benefit reductions,'' 
     the Kaiser report concluded. Unless Congress and President 
     Obama extend the federal aid, the cuts needed to balance 
     state budgets may be ``on a scale not ever seen in 
     Medicaid,'' the authors warned.
       ``What we will have to look at is wholesale elimination of 
     eligibility groups,'' Mr. Duarte said.
       Deborah Bachrach, New York's Medicaid director, said her 
     state would face a $5 billion annual gap and would have to 
     consider deep cuts in home and personal care.
       Both Mr. Duarte and Ms. Bachrach said there likely would be 
     further cuts in provider payments. ``This could affect 
     access,'' Mr. Duarte said, ``but we're at the point where 
     that may be a secondary consideration.''
       Governors also have expressed concern about the fiscal 
     impact of the health care legislation being negotiated in 
     Washington, which would vastly expand eligibility for 
     Medicaid as one means of covering the country's 46 million 
     uninsured.
       The program is largely limited at present to low-income 
     children, pregnant women and parents of qualifying children. 
     But under bills in both houses, eligibility would be granted 
     to anyone with an income of up to 133 percent of the federal 
     poverty level (currently $29,326 for a family of four). That 
     could add an estimated 11 million people to the rolls.
       Initially, the federal government would absorb most of the 
     cost. But the bills vary on that score and some states may 
     bear higher costs than others. Three-fourths of the Medicaid 
     directors said they thought the changes might deepen their 
     budget holes.
       ``Many officials felt that their states would be unable to 
     finance the cost of a Medicaid eligibility expansion unless 
     the federal government assumed 100 percent of the costs, 
     especially during the early years,'' the report said.

  Mr. ALEXANDER. Mr. President, the headline is ``Rate of Enrollment in 
Medicaid Rose Rapidly, Report Says.''

       The recession is driving up enrollment in Medicaid at 
     higher than expected rates, threatening gargantuan State 
     budget gaps--

  This is the New York Times; this is not the Republican Party saying 
this--

     even as Congress and the White House seek to expand the 
     government health insurance program for the poor and 
     disabled.

  It goes on to say:

       As unemployment surged, enrollment in State Medicaid 
     programs grew by an average of 5.4 percent in the previous 
     fiscal year, the highest rate in 6 years . . . in eight 
     States, the growth exceeded 10 percent.
       Three-fourths of the agency directors of Medicaid said they 
     already fear their appropriations will not be enough and that 
     lawmakers will have to find more money or, more likely, cut 
     benefits or provider payments.
       One such State is Nevada.

  The home State of the majority leader.

       We're seeing the trajectories of our enrollment growth as 
     well as our revenues all going in the wrong direction--

  Said their head of financing. State budgets were buffered from even 
worse pain by the stimulus package, but the New York Medicaid director 
said her State would face a $5 billion annual gap and would have to 
consider deep cuts in home and personal care, and that is before we 
make any changes or add any costs.
  When the Federal Government talks about adding State Medicaid costs:

       Three-fourths of the Medicaid directors--

  The New York Times said--

     said they thought the changes might deepen their budget 
     holes.

  What do you suppose in Georgia--already struggling in the way you 
have just described--would happen if--and this is why we said we insist 
on reading the bill before we vote on it and knowing how much it costs 
before we vote on it. We want to know exactly what the provisions are 
because I hear that States will be required to pay 5 to 22 percent in 
the first 5 years of the Medicaid expansion, and then after 5 years 
they might have to go up to 35 percent or so.
  What do you suppose will happen to Georgia if these kinds of costs 
are added to the State budget?
  Mr. ISAKSON. I will tell you a little story that happened in the 
month of August that is indicative of what is going to happen in 
Medicaid services if we have the continuing pressure. I was in Forsyth, 
GA. It is about halfway between Macon and Atlanta. I had done a speech 
at the Law Enforcement Training Center and decided to go into the local 
sandwich shop in downtown Forsyth and have a sandwich and greet people 
and say hello. I had greeted people and said hello. There were about 10 
of them in the room. I went up to get my sandwich. When I came back 
this lady had circled all the tables around and saved a seat for me, 
and said: Senator, we are going to have a townhall meeting. They 
started talking to me about their concerns.
  Toward the end of the meeting, one gentleman at the end of the table 
finally said: Senator, I want to tell you a story. I am a pediatric 
ophthalmologist. I am the last pediatric ophthalmologist who takes 
Medicaid patients.
  He said: I just want to tell you what is happening because of the 
pressure on Medicaid expenses.
  He said: I have a child right now who has a condition where if it is 
not addressed, the child will go blind. There is a medicine, it is very 
expensive, but it can restore the cornea and the lens and help that 
child to be able to see. We have submitted it three times to Medicaid, 
and they will not pay it. It is the only drug. There is not an option. 
There is not a generic substitution. It is one of the breakthroughs.
  So what we have already going on in health care and in our 
entitlement programs, but in particular in Medicaid, is we try and 
manage the expense by lessening the amount we reimburse. The unintended 
consequence of that is we

[[Page 23376]]

lose physicians who finally say: I am just not going to take Medicaid 
patients anymore.
  Then, the ones who finally are doing it, then we start to see what 
they submit as a treatment not being approved for reimbursement. So the 
unintended consequence of putting even more pressure on the Medicaid 
system is going to put more pressure to ration health care for all 
Medicaid patients, and that is not fair nor is it right.
  Mr. ALEXANDER. No, it is not fair or right. The Governors have said, 
Democratic and Republican Governors--and the Senator raised a second 
point about this Medicaid expansion: That dumping millions more low- 
income Americans into Medicaid is not health care reform because 
Medicaid, as the Senator just pointed out, so poorly reimburses the 
doctors and the hospitals that about 40 percent of doctors will not see 
Medicaid patients.
  So when we say to someone: Congratulations, we have just fixed the 
health care system; we have dumped you into Medicaid, you are giving 
somebody a bus ticket to a bus system that operates 60 percent of the 
time. So the first thing we are doing with the proposal as it is coming 
toward us is we are--and I am not exaggerating--we are potentially 
bankrupting States.
  Speaking of States, let me just share one letter with Senator Isakson 
from the Governor of California.
  This is a State that has really struggled with its budgets. They have 
a number of problems.
  Here is what the ``Terminator'' has to say. He wrote to Senator Reid 
and to Senator McConnell on the Republican side and Speaker Pelosi. It 
is a long letter. This is the basic idea. Arnold Schwarzenegger says:

       I will be clear on this particular proposal: if Congress 
     thinks the Medicaid expansion is too expensive for the 
     federal government, it is absolutely unaffordable for states.

  Governor Schwarzenegger goes on to say:

       Proposals in the Senate envision passing on more than $8 
     billion in new costs to California annually--crowding out 
     other priorities or constitutionally required state spending 
     and presenting a false choice for all of us. I cannot and 
     will not support federal health care reform proposals that 
     impose billions of dollars in new costs on California each 
     year.

  I ask unanimous consent that this letter be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                    July 31, 2009.
     Hon. Harry Reid,
     Majority Leader U.S. Senate, Washington, DC.
     Hon. Mitch McConnell,
     Minority Leader, U.S. Senate, Washington, DC.
     Hon. Nancy Pelosi,
     Speaker of the House, House of Representatives, Washington, 
         DC.
     Hon. John A. Boehner,
     Minority Leader, House of Representatives, Washington, DC.
       Dear Senator Reid, Senator McConnell, Madam Speaker and Mr. 
     Boehner: I appreciate your commitment and hard work toward 
     reforming the nation's health care system. I think we can all 
     agree that the current system is not working as it should, 
     and I have long supported a significant overhaul. Costs 
     continue to explode, while tens of millions remain uninsured 
     or underinsured. Many families are one illness away from 
     financial ruin--even if they do have insurance. We have the 
     greatest medical technology in the world at our fingertips, 
     yet Americans' health status lags behind many countries that 
     spend less than half what we do per capita. Any successful 
     health care reform proposal must be comprehensive and built 
     around the core principles of cost containment and 
     affordability; prevention, wellness and health quality; and 
     coverage for all.


                   Cost Containment and Affordability

       Cost containment and affordability are essential not only 
     for families, individuals and businesses, but also for state 
     governments. Congress is proposing significant expansions of 
     Medicaid to help reduce the number of uninsured and to 
     increase provider reimbursement. Today, California 
     administers one of the most efficient Medicaid programs in 
     the country, and still the state cannot afford its Medicaid 
     program as currently structured and governed by federal rules 
     and regulations. The House originally proposed fully funding 
     the expansion with federal dollars, but due to cost concerns, 
     members decided to shift a portion of these expansion costs 
     to states. I will be clear on this particular proposal: if 
     Congress thinks the Medicaid expansion is too expensive for 
     the federal government, it is absolutely unaffordable for 
     states. Proposals in the Senate envision passing on more than 
     $8 billion in new costs to California annually crowding out 
     other priority or constitutionally required state spending 
     and presenting a false choice for all of us. I cannot and 
     will not support federal health care reform proposals that 
     impose billions of dollars in new costs on California each 
     year.
       The inclusion of maintenance of effort restrictions on 
     existing state Medicaid programs only compounds any cost 
     shift to states. We simply cannot be locked into a cost 
     structure that is unsustainable. Governors have three primary 
     ways to control Medicaid costs: they can adjust eligibility, 
     benefits and/or reimbursement rates. Maintenance of effort 
     requirements linked to existing Medicaid eligibility 
     standards and procedures will effectively force state 
     legislatures into autopilot spending and lead to chronic 
     budget shortfalls.
       The federal government must help states reduce their 
     Medicaid financing burden, not increase it. A major factor 
     contributing to Medicaid's fiscal instability, before any 
     proposed expansion, is that the program effectively remains 
     the sole source of financing for long-term care services. 
     Therefore, I am encouraged by congressional proposals that 
     create new financing models for long-term care services. 
     Proposals that expand the availability and affordability of 
     long-term care insurance are steps in the right direction, 
     but they must be implemented in a fiscally sustainable way. 
     More fundamentally, however, the federal government must take 
     full responsibility for financing and coordinating the care 
     of the dually eligible in order to appreciably reduce the 
     cost trend for this group. This realignment of 
     responsibilities is absolutely essential to controlling costs 
     for this population, while ensuring that state governments 
     will be better positioned to fill in any gaps that will 
     undoubtedly arise from federal health care reform efforts.
       I also encourage Congress to incorporate other strategies 
     to help stabilize Medicaid costs for states. Delaying the 
     scheduled phase-out of Medicaid managed care provider taxes 
     pending enactment of new Medicaid rates, reimbursement for 
     Medicaid claims owed to states associated with the federal 
     government's improper classification of certain permanent 
     disability cases, and federal support for legal immigrant 
     Medicaid costs are examples of federal efforts that could 
     provide more stability to state Medicaid programs. Moreover, 
     given the fiscal crisis that many states, including 
     California, are experiencing, I strongly urge Congress to 
     extend the temporary increase in the federal matching ratio 
     to preserve the ability of state Medicaid programs to 
     continue to provide essential services to low-income 
     residents pending full implementation of national health 
     reform.


                Prevention, Wellness and Health Quality

       Prevention, wellness and health promotion, along with 
     chronic disease management, can help to lower the cost curve 
     over the long run and improve health outcomes in the near 
     term. This was one of the cornerstone pieces of my health 
     care reform proposal in California, and I continue to believe 
     it should be a key piece of the federal efforts. Prevention, 
     wellness and chronic disease management programs should 
     include both the individual and wider population levels.
       At the individual level, proposals to provide refunds or 
     other incentives to Medicare, Medicaid and private plan 
     enrollees who successfully complete behavior modification 
     programs, such as smoking cessation or weight loss, are 
     critical reforms. To ensure they are widely used, individual 
     prevention and wellness benefits should not be subject to 
     beneficiary cost sharing.
       Because individuals' behaviors are influenced by their 
     environments, health reform must place a high priority on 
     promoting healthy communities that make it easier for people 
     to make healthy choices. California has demonstrated through 
     its nationally recognized tobacco control efforts that 
     population-based strategies can be effective and dramatically 
     change the way the people think and act about unhealthy 
     behaviors, such as tobacco use. A similar model, community 
     transformation grants, has been advanced in the Senate 
     Committee on Health, Education, Labor, and Pension 
     legislation, and it should be included to support policy, 
     environmental, programmatic and infrastructure changes that 
     address chronic disease risk factors, promote healthy living 
     and decrease health disparities.
       Quality improvement measures are also critical to health 
     reform. The House proposal for a Center for Quality 
     Improvement to improve patient safety, reduce health care-
     associated infections and improve patient outcomes and 
     satisfaction is a positive step. Coordinated chronic disease 
     management is necessary to improve outcomes for chronically 
     ill people. Systematic use of health information technology 
     and health information exchange, including access for public

[[Page 23377]]

     health agencies, is vital to providing the necessary tools to 
     measure the success of quality improvement efforts. Finally, 
     investments in core public health infrastructure can be 
     facilitated through the creation of the proposed Prevention 
     and Wellness Trust.


                            Coverage for All

       Coverage for all is also an essential element of health 
     care reform and I believe an enforceable and effective 
     individual mandate, combined with guaranteed issuance of 
     insurance, is the best way to accomplish this goal. The 
     individual mandate must provide effective incentives to help 
     prevent adverse selection that could occur if the mandate is 
     too weak. Creating transparent and user-friendly health 
     insurance exchanges to help consumers compare insurance 
     options will also help facilitate participation. States 
     should maintain a strong role in regulating the insurance 
     market and have the ability to maintain and operate their own 
     exchanges, with the understanding that some national 
     standards will need to be established. California has a long 
     history of protecting consumers through our two separate 
     insurance regulators, one covering health maintenance 
     organizations and the other monitoring all other insurance 
     products. Maintaining a strong regulatory role at the state 
     level is in the best interest of consumers, and I urge 
     Congress to maintain this longstanding and effective 
     relationship as you design these new market structures.
       I hope our experience in California working toward 
     comprehensive health care reform has informed the debate in 
     Washington. There will be many short-term triumphs and 
     seemingly insurmountable roadblocks for Congress and the 
     nation on the road to comprehensive health care reform. We 
     must all remain focused on the goal of fixing our health care 
     system and remember that we all have something to gain from 
     the reforms, and we all have a shared responsibility to 
     achieve them. I look forward to working with you as you move 
     forward on this desperately needed legislation.
           Sincerely,
                                            Arnold Schwarzenegger.

  Mr. ALEXANDER. Madam President, I say to the Senator from Georgia 
that we are not being clever when we say we would like to be cosponsors 
of the Harry Reid amendment. The problems of the States are so well 
documented today. They don't just exist in Nevada or the two or three 
other States he picked out yesterday; they exist in California, which 
is now not part of the Reid amendment. I guess that Senators Feinstein 
and Boxer would be happy to cosponsor the Reid amendment if it included 
California. I certainly would be if it included Tennessee. I know the 
Senator from New York and others would be also.
  Our States cannot afford to have the Federal Government say: We are 
going to expand your health care, Mr. and Mrs. Low-Income American. It 
is not a very good health care program. And then we are going to send 
40 percent of the bill to States that are already bankrupt, making it 
more difficult for them to provide good care.
  Mr. ISAKSON. The Senator from Tennessee has said frequently over the 
last couple of months that what we really need to do is take a step-by-
step approach. Comprehensive health care reform's unintended 
consequences will be a disaster because it affects 17 percent of the 
economy. You are taking the entitlements and 86 percent of the people 
who have some coverage and you are threatening that they have to go 
into a government option. This Medicaid debate is a good example of how 
we need to take a step-by-step approach, we need to take first things 
first.
  In the report before our committee, the HELP Committee, on which we 
serve together, we spent 67\1/2\ hours in the markup on that bill 
during the months of June and July. We heard about the uninsured and 
the uncovered in America. Of that 14 to 16 percent we hear about, a 
number of them are Medicare or Medicaid eligible, and they are not 
enrolled. So the first step we ought to take is to say we are going to 
create a mechanism where every Medicaid-eligible person and Medicare-
eligible person is covered, which would probably mean that when someone 
visits a hospital because they are ill and they are qualified for 
Medicare or Medicaid, they get enrolled automatically so that they do 
have the coverage. That is the first step we ought to take in terms of 
entitlement.
  Then we can take another part of the uninsured--those people you and 
I talk about, the independent contractors, small businesspeople--and we 
can allow the forming of risk pools across State lines and insurance 
sales across State lines and allow like professions to associate 
together to form larger risk pools to compete with major corporations. 
And then insurance becomes more accessible and affordable.
  This debate we are having over Medicaid and the Governors' immediate 
reaction--which is 100 percent of the Governors, not just a couple--
demonstrates to us that we need to slow down and take step-by-step 
approaches to begin addressing the uncovered and uninsured without 
creating unintended consequences that bankrupt States and ration health 
care.
  Mr. ALEXANDER. The Senator is being very sensible. I think most 
Americans would agree with us that our goal is to reduce the costs of 
health care--reduce the costs of your health care insurance when you 
buy it and reduce the costs to your government that is running up a big 
debt every year.
  The Senator from Georgia mentioned two specific ways we can take 
steps in the right direction without getting into this business of 
taking over so much in Washington, with trillions of dollars of debt, 
passing on big taxes to States, and cutting Medicare and threatening 
seniors in a whole variety of other ways. One was to allow small 
businesses to pool their insurance so they could offer more to their 
employees. That could affect millions of Americans. Another was to sign 
up more people who are already eligible. Another is to do something 
about junk lawsuits against doctors that are driving up costs. Another 
is to create more insurance exchanges in the States. We have proposed 
these.
  People say: Where is the Republican plan? If they are looking for 
some comprehensive, trillion-dollar, thousand-page bill, they are not 
going to see it. If they are looking for four or five practical steps 
to move in the right direction, we talk about that every day, and we 
are not afraid to warn against the big, thousand-page bill plans. We 
compliment the Senator from Nevada for recognizing that it would ruin 
his State if we passed this bill, and we hope we have the opportunity 
to cosponsor that amendment so it applies to every State.
  Mr. ISAKSON. There is no question--when the Senator referred to 
independent contractors, I had a flashback to my 33 years in business. 
For 22 of those years, I ran a real estate brokerage company. I had 
accountants, secretaries, and backroom operators. All my salespeople 
were independent contractors. I provided group medical under ERISA for 
my secretaries, backroom operators, and my employees, but the Federal 
law--the IRS Code--prohibits an employer from providing health care to 
an independent contractor.
  So here we have another unintended consequence of a Federal mandate 
that says to somebody: Simply because of the way in which you establish 
yourself and earn your income, some people can get group medical 
coverage and some cannot. In the case of those who worked for me, it 
forced second-career, middle-aged people not to be able to participate 
in a group policy. They had to buy insurance in the spot market. That 
spot market in health care is expensive because there is no shared 
risk. You don't have young people, older people, and well people to 
balance the cost of the pool. You have one individual who, if they 
already have health problems, may be uninsurable because of a 
preexisting condition.
  It is important that we look at the existing unintended consequences 
in the Tax Code that prohibit companies from being able to offer group 
medical insurance to the independent contractors who work for them.
  Mr. ALEXANDER. That is exactly right.
  As we think about Senator Reid's amendment and also the step-by-step 
proposals, one way to describe his amendment is to say to Nevada--and 
Oregon, Rhode Island, and Michigan--that we are going to pay 100 
percent of your Medicaid costs. That is a step in the right direction. 
I think that is the way I should characterize that. That is not a 
criticism of the majority leader. That is saying: Mr. Majority Leader, 
you are going in the right direction, but you didn't include Tennessee, 
and

[[Page 23378]]

Tennessee is not expected to recover to the 2008 levels until 2014. 
State employees won't receive raises for 6 years, the reserves will be 
depleted, and there will be no new construction projects.
  Our Governor, a Democrat, said this proposal is the mother of all 
unfunded mandates. So I think Tennessee Senators would like to be 
included in the Reid amendment. I imagine the Texas Senators would too. 
The Texas Medicaid office says the proposal would cost their State $20 
billion over 10 years if we here expand Medicaid there and make them 
pay for a third or 40 percent of that. The South Carolina Governor says 
it would cost their State $1.1 billion over 10 years. I imagine those 
Senators would like to be a part of this. The Alaska Governor says it 
would cost $140 million in State general funds. I imagine the Alaska 
Senators would like to cosponsor the amendment. Governor 
Schwarzenegger--I suppose his Senators would like to be part of this as 
well. The Nebraska Governor says this could mean higher taxes in 
Nebraska, cutting State aid to Nebraska school districts as well as 
State appropriations to universities. This proposal is not in 
Nebraska's best interest. The South Dakota Governor said so as well.
  This is serious business for the States. It is easy, when you come to 
Washington, to forget about the States. In the States, if you are a 
Governor or if you are a legislator, as the Senator from Georgia and I 
have been, you have to put all your responsibilities out there ahead of 
you. The first one is education. You take the available money and spend 
it as best you can and you balance your budget. Then you look up to 
Washington, and here comes some Congressman or Senator saying: I have a 
great idea; let's expand health care all over your State and you will 
pay for it. That is called an unfunded Federal mandate. It is the wrong 
thing to do. The Senator from Nevada noticed it in his State.
  All States would like to be part of that amendment.
  Mr. ISAKSON. I agree. You cannot just treat 4 States differently from 
the other 46. You have to treat everybody alike.
  I say to Senator Alexander that there is another step-by-step thing 
we ought to talk about. In the pay-fors--the Medicaid increase of 150 
percent is a pay-for. It is part of the cost of insuring everybody. 
There is another one; that is, the assumed $500 billion in savings from 
waste, fraud, and abuse in Medicare. I got a phone call----
  Mr. ALEXANDER. That often confuses people. Medicaid is the program we 
have been talking about, of which States administer and pay a third or 
40 percent. That has about 59 million people in it. The proposal is to 
move it to where one out of four Americans would be on Medicaid. There 
is also Medicare, which has about 40 million people, all seniors.
  Mr. ISAKSON. This is my Medicare month. I am supposed to enroll. So 
it is now a personal issue with me.
  Mr. ALEXANDER. That is the way it is with most Americans. It has 
become a personal issue, and I think that is why so many people are 
going to townhall meetings.
  Mr. ISAKSON. I did a telephone townhall meeting, and a fellow said: 
Senator, I have a question for you. If there is $500 billion in savings 
in Medicare, why aren't you all using it now to help save Medicare 
instead of giving it to another program to pay for it? Medicare is 
going broke by 2017.
  Mr. ALEXANDER. Yes, and that is not just a casual statement. Those 
are the Medicare trustees, whose job it is to look over the Medicare 
money, who are saying it is going broke by 2015 to 2017.
  Mr. ISAKSON. They are saying it is over. So we are selling a revenue 
saver to pay for the expansion of health care at the Federal level by 
saying we are going to reduce payout for seniors in Medicare by $\1/2\ 
trillion in waste, fraud, and abuse. Well, assuming we know there is 
$\1/2\ trillion there, it ought to already be cut out and it ought to 
be going into the Medicare trust fund to shore it up so it lasts longer 
than 2017. We should never promise we are going to pay for something on 
something we think is there and then just move the numbers down for the 
convenience of making a sale today.
  I think, as a senior, and on behalf of all seniors, we all realize if 
that $\1/2\ trillion isn't there in waste, fraud, and abuse, the first 
thing you are going to do is have reimbursements cut; the next thing, 
instead of three out of four doctors taking Medicare patients, it will 
only be two out of four or one out of three; and pretty soon the next 
thing is that seniors will have health care that is inaccessible and 
their doctors will not be available. That is a dangerous road to go 
down.
  Mr. ALEXANDER. I hear our friends on the other side say: Republicans 
are trying to scare you about Medicare cuts. We are not trying to scare 
anybody about Medicare cuts. We just listen, and the President said in 
his speech to us that the savings for this program--nearly $\1/2\ 
trillion in savings to pay for the new program is coming from savings 
in Medicare. That is Medicare cuts. We know the specific proposals are 
$130 billion in cuts to Medicare Advantage, which one out of four 
Medicare seniors has; $120 billion in Medicare cuts to hospitals; $40 
billion to home health agencies; $8 billion to hospices.
  Our point, if I am correct about this--and if I am not, please 
correct me--of course there could be savings in Medicare, in the growth 
of it, but if we have savings in Medicare, we ought to put the money 
into Medicare; we ought not to take it from grandma and spend it on 
somebody else. That is the problem. The other day, the Senator from 
Kansas said it is like writing a check on an overdrawn bank account to 
buy a big, new car. Whatever money we ought to have ought to go in the 
overdrawn bank account, which is Medicare.
  Mr. ISAKSON. That is correct.
  Social Security is another example of what happens when you don't 
have good fiscal discipline. Unfortunately, for the better part of half 
a century, when people have paid their FICA taxes to go into the Social 
Security trust fund, it goes in and then immediately it is replaced by 
an IOU and the money is moved to general appropriations and spent. That 
is why Social Security is going broke in 2037. I just got my statement 
last week, and on the cover--everybody ought to read their Social 
Security letter, the column on the right-hand side which tells you what 
the trustees are telling you about the solvency of Social Security.
  We cannot make any more hollow promises to the American people. We 
have to keep the promises we have made, and those promises are 
Medicare, Social Security, and Medicaid. So instead of expanding things 
we already can't afford, we need to be finding ways to stabilize them 
before we run off and make a promise we can't keep.
  Mr. ALEXANDER. Madam President, how much time do we have remaining?
  The ACTING PRESIDENT pro tempore. There is 13 minutes 54 seconds 
remaining.
  Mr. ALEXANDER. Two minutes fifty-four seconds. If the Senator from 
Georgia will permit me, I ask unanimous consent to put in the Record 
the following----
  The ACTING PRESIDENT pro tempore. The Senator has 13 minutes 
remaining.
  Mr. ALEXANDER. I thought you said 2 minutes 54 seconds. We will 
continue. I remember former Senator Warner once said when he first came 
to the Senate, he was sitting there wondering what to do. One of the 
older Senators came over and said to him: Son, you will have no trouble 
getting used to this. All you have to do is stand up and start talking 
and eventually you will think of something to say.
  I think we have something of considerable importance to say. What we 
are saying is we need health care reform and the focus should be on 
reducing costs and we ought to go step by step toward those costs. That 
is our proposal, instead of these big, comprehensive, trillion-dollar, 
1,000-page bills with all these unintended consequences.
  We are talking about one of those unintended consequences, which is a 
very severe consequence for the States. The idea that Senators and 
Congressmen

[[Page 23379]]

would decide to expand a program that is going to cover one out of four 
Americans, called Medicaid, and just send the bill to the States which, 
according to today's Wall Street Journal: ``plunging state revenues 
noted that the second quarter was the worst performance for state taxes 
since at least the 1960s.'' This is not just Nevada and Michigan and 
Oregon and Rhode Island, which are the four States that were in the 
majority leader's amendment. This is virtually all the States.
  If the Senator from Georgia will indulge me for a moment, I have 
several letters from Governors to Senators that I ask unanimous consent 
to have printed in the Record at the end of our remarks.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  (See exhibit 1.)
  Mr. ALEXANDER. Madam President, here is a letter to Mr. Bill Nelson, 
a Senator from Florida, from Gov. Charlie Crist, talking about 
enrollment in Florida's Medicaid Program increasing and how the State 
of Florida cannot afford to spend more.
  I have a letter from Governor Otter of Idaho to Senator Crapo: ``It 
has been estimated that combined federal-state Medicaid costs in Idaho 
could increase by $501 million.''
  I have a letter from Governor Daniel of Indiana to Senator Lugar 
which says: ``We have estimated that the price for Indiana could reach 
upwards of $724 million annually.''
  We talk about big numbers in Washington so much that maybe this 
doesn't sound like much. But I did an estimate of what it would cost, I 
say to Senator Isakson, in Tennessee if we expanded Medicaid in the way 
it is proposed here and we increase the reimbursement rate so patients 
in Medicaid will actually have somebody to go see, a doctor or a 
hospital to go see. I said it equaled about a new 10-percent State 
income tax. Some group in Tennessee said: The Senator is wrong, it is 
only about a 3-percent new State income tax. Well, either one, we don't 
want elected representatives in Washington deciding for us whether we 
want a new 10-percent or 3-percent State income tax.
  There are just a few more I wish to include. I have a letter to 
Senator Reed from the Governor of Rhode Island. Of course, Rhode Island 
was included in the majority leader's amendment. They should feel 
pretty good. They are going to get 100 percent of their Medicaid paid.
  The Governor of Arizona has written to Senator McCain and Senator Kyl 
to point out that ``Arizona is facing one of the worst financial 
deficits in the nation. . . .'' If Arizona is facing one of the worst 
financial deficits in the Nation, why is it left out of the majority 
leader's amendment? It seems to me the citizens of Arizona deserve just 
as much attention. I imagine their Senators would like to cosponsor it 
as well.
  I have a letter from the Governor of Louisiana talking about an 
unprecedented fiscal situation and the Governor of Mississippi saying:

       In Mississippi, the issue of Medicaid expansion hits close 
     to home, since our state's share of the Medicaid is currently 
     $707 million. . . .

  ``According to the National Association of State Budget Officers, 
Governor Barbour said, Medicaid expenses . . . were $336 billion'' for 
State and local government and a third of that is State money, and we 
are just going to up it. We don't raise that money, we just send them 
an edict from Washington and say: We have decided that a good thing to 
do is to increase the number of low-income Americans in your Medicaid 
Program and you pay for it, you take it out of this road, you take it 
out of this teacher's salary, you raise the tuition at the University 
of Tennessee or Georgia and you cut their State funds. That is up to 
you, but we are going to pass the program.
  Here is a letter to the Senator from Nebraska saying this new 
unfunded Federal Medicaid mandate could result in higher taxes in 
Nebraska or in cutting State aid to Nebraska school districts. I 
imagine the Senators from Nebraska, both of whom were Governors, would 
be happy to be cosponsors of the Reid amendment.
  Here is the letter to Senator Graham from the Governor of South 
Carolina. Another from the Governor of Alabama; a letter from the 
Governor of Alaska and the Governor of Guam.
  I say to Senator Isakson, we have been fairly specific on one point. 
I heard on the television this morning someone said this is so 
confusing to the American people; they don't understand it. I think 
they can understand an unfunded Federal mandate. I think they can 
understand the Governor has to raise taxes unless Congress pays 100 
percent of it. I think they can understand it when the majority leader 
picks out four States and says we will pay 100 percent of ours and the 
rest want to be part of that as well.
  Mr. ISAKSON. The American people understand. This colloquy has been 
helpful to demonstrate something, I say to Senator Alexander. We on the 
Republican side have been accused from time to time of being 
obstructionists on health care reform. I think we indicated this 
morning we have been instructive, going on a step-by-step basis, 
dealing with the problems manageable one at a time, not sacrificing 
Social Security or Medicaid or Medicare, not sacrificing our States and 
forcing them into the impossible position of declining revenues and 
increasing costs through a mandated Federal program that, in the end, 
is only going to result in rationing of care to Medicaid-eligible 
beneficiaries and more and more pressure on our States already.
  We are not trying to obstruct anything. We find it very instructive 
that there are ways, on a step-by-step basis, that we can close the gap 
on the number of uninsured people without taking away the benefits 
others have.
  I thank the Senator for allowing me the opportunity to participate in 
this discussion. We are learning from our Governors. I have learned 
from my townhall meetings and from my visits in Georgia. We understand 
America is tuned in and a lot of America, 16 percent of it, needs 
attention for more affordable, accessible health care. Let's be about 
the business, on a step-by-step basis, of providing that and closing 
that gap without threatening to destroy the programs we have 
established over the years and promised to our seniors and to those 
less fortunate.
  Mr. ALEXANDER. Madam President, I thank the Senator from Georgia for 
his experience in State government and for his comments today. We want 
the majority leader to know our comments yesterday were not to be 
critical of him, just to say we think he is on the right track. He said 
to four States: If we expand your Medicaid, we are going to pay for it. 
We would like to include all States.
  I yield the floor.

                               Exhibit 1


                                             State of Arizona,

                                       Phoenix, AZ, July 16, 2009.
     Senator John McCain,
     U.S. Senate,
     Washington DC.
     Senator Jon Kyl,
     U.S. Senate,
     Washington, DC.
       Dear Senator McCain and Senator Kyl: Thank you for the 
     opportunity to provide information about Arizona's Medicaid 
     program, the Arizona Health Care Cost Containment System 
     (AHCCCS).
       As you know, Arizona is facing one of the worst financial 
     deficits in the nation and projections show that the State is 
     expected to make a slow recovery. In the meantime, 
     unemployment has continued to increase and counter-cyclical 
     programs like AHCCCS have continued to experience record-
     breaking enrollment. In the last four months alone, AHCCCS 
     has grown by more than 100,000 new enrollees, and July 2009 
     enrollment is almost 17 percent above the same month in 2008. 
     Total enrollment, including our Title XXI KidsCare program, 
     in July reached 1,275,109 members, which is almost 19 percent 
     of the state's total population.
       I am proud that AHCCCS program has served as a model for 
     other state Medicaid programs across the country in terms of 
     cost containment. This is due, in large part, to the fact 
     that AHCCCS is a capitated managed care model and 65 percent 
     of its long-term care members receive home and community 
     based services rather than institutional care. According to 
     the Kaiser Family Foundation, AHCCCS has the lowest per 
     member per year (PMPY) cost among Medicaid programs in the 
     country. The average PMPY costs are: 1) $5,645.52 for acute 
     care; 2)

[[Page 23380]]

     $45,960.72 for long-term care, which is a blended average of 
     our elderly and physically disabled and developmentally 
     disabled programs. The weighted average PMPY cost across all 
     Title XIX groups is $7,182.60.
       I am concerned that the Medicaid expansion proposals being 
     discussed at the federal level do not consider the fiscal 
     difficulties states are facing and are likely to continue to 
     face over the next few years. At the same time as Congress is 
     considering prohibiting states from changing their Medicaid 
     eligibility standards, there have been discussions about 
     establishing a federal floor for Medicaid provider rates, 
     which even further limits state flexibility in setting 
     funding levels. State flexibility has been key to Arizona's 
     success in developing and efficiently managing a Medicaid 
     program that provides high quality care at a low cost.
       Even with our strong cost containment measures, I remain 
     concerned about Arizona's ability to sustain the existing 
     AHCCCS model, let alone a mandatory expansion to 150 percent, 
     regardless of whether the federal government provides full 
     financing of the expansion for the first five years. Medicaid 
     is already an increasing share of state budgets--Arizona's 
     General Fund spending on AHCCCS has increased by 230% over 
     the past ten years, and has risen from 8 percent of General 
     Fund spending in FY 1999 to an estimated 16 percent in FY 
     2009. Maintaining this level of spending increases will be 
     difficult, especially given that Medicaid enrollment and 
     costs continue to rise. Moreover, Arizona's revenues are not 
     expected to turn around for several years and, even when they 
     do rebound, we would require significant revenue growth in 
     order to sustain rising expenditures for the existing 
     Medicaid program.
       Attached, please find data responsive to your requests. 
     There is a summary sheet that provides an overview of the 
     information requested, along with several other sheets that 
     provide additional detail. As you know, there are many 
     unanswered questions regarding the proposals. This analysis 
     includes the assumptions that were used to develop the 
     figures, which will obviously change as the proposals are 
     refined.
       Please do not hesitate to contact my office if you have 
     questions or should require additional information. I share 
     your concern regarding Arizona's ability to expand its 
     Medicaid program and what the long-term fiscal implications 
     will be for Arizona, and I hope you find this information 
     useful as you consider the various proposals that are before 
     you.
           Sincerely,
                                                 Janice K. Brewer,
     Governor.
                                  ____



                                             State of Indiana,

                              Indianapolis, IN, September 8, 2009.
     Hon. Richard Lugar,
     Hart Senate Office Building,
     Washington, DC.
       Dear Senator Lugar: During your summer recess I am sure 
     that many, if not all of you heard from your constituents 
     regarding health care reform.
       I have heard from them as well. In fact, over the past few 
     months, I have watched Americans come forward to passionately 
     express their anxieties about the legislation currently 
     making its way through Congress. Their worries are well-
     founded.
       There is no disputing the fact that aspects of American 
     health care, such as access and affordability, truly do need 
     to be restructured and improved. Yet, I have serious concerns 
     about Congress's proposed solutions to these problems. In 
     fact, I fear the current rush to overhaul the system will 
     ultimately do more damage than good and create far more 
     problems than it solves.
       And unfortunately, Indiana would bear the brunt of many of 
     the reckless policies being proposed. For example, our 
     Healthy Indiana Plan (HIP), an innovative and successful 
     state sponsored health insurance program for uninsured 
     citizens, would suffer greatly as Congress expands Medicaid 
     coverage, forcing many of the Hoosiers already enrolled in 
     HIP out of the plan and into a broken Medicaid program that 
     does not focus on prevention, healthy lifestyles, or personal 
     responsibility.
       Additionally, states will likely have to pick up the tab 
     for this extension of Medicaid. We have estimated that the 
     price for Indiana could reach upwards of $724 million 
     annually. These additional costs will overwhelm our resources 
     and obliterate the reserves we have fought so hard to 
     protect.
       While these reforms could do serious damage to our state, I 
     fear they will also have harmful consequences all across the 
     country by reducing the quality and quantity of available 
     medical care, stifling innovation, and further burdening 
     taxpayers.
       There is another way. Americans from all walks of life and 
     every political stripe should work together with President 
     Obama and Congress to create a set of measured and sensible 
     reforms that bring down costs, increase access and 
     portability and stress the importance of innovative state-run 
     health insurance programs.
       The majority of Americans do believe that health care 
     reform is needed, but do not believe that the legislation 
     currently on offer is the answer. I agree. And I will do 
     everything in my power to raise these concerns and work with 
     you to find a solution.
           Sincerely,
                                                M.E. Daniels, Jr.,
     Governor.
                                  ____



                                               State of Idaho,

                                 Boise, Idaho, September 15, 2009.
     Hon. Mike Crapo,
     U.S. Senate, Dirksen Senate Office Building, Washington, DC.
       Dear Senator Crapo: Idaho has a proud history of fiscal 
     responsibility, ensuring that our State government serves its 
     proper role for the people of Idaho while staying within 
     their financial means. As the United States Congress attempts 
     to address the healthcare challenges facing our nation, it is 
     important that we remain diligent in assessing the 
     implications of our decisions, always ensuring that we take 
     seriously our duty to safeguard the financial resources of 
     the American public, and allocating taxpayer money in an 
     efficient and effective manner.
       As revised healthcare proposals continue appearing in 
     Congress, the full consequences of these reforms remain 
     unknown and we are uncertain of the possible negative impacts 
     on local businesses, families and senior citizens. However, 
     it is clear that these sweeping proposals would irresponsibly 
     shift a substantial and unmanageable financial burden to the 
     states. Like Idaho, many states already are functioning under 
     severely limited and strained budgets. It is certain that the 
     burden of these reforms would be placed upon the shoulders of 
     hardworking Americans.
       The costs associated with these proposed reforms are 
     astounding. Conservative estimates from the Idaho Division of 
     Medicaid indicate that the bill's Medicaid eligibility 
     proposal would increase our state share of Medicaid and the 
     federal matching rate effective would drop in the middle of 
     fiscal year 2011, leaving Idaho struggling to fill the void. 
     Idaho's tax base could not support this large unfunded 
     mandate without resorting to tax increases, including a 
     possible increase in Idaho's already 6-cent sales tax--an 
     irresponsible action which would do serious harm to Idaho 
     taxpayers. The proposed reforms would impose an undue burden 
     on citizens already struggling in this difficult economy.
       It has been estimated that combined federal-state Medicaid 
     costs in Idaho could increase by $501 million. In addition, 
     raising the Medicaid reimbursement rate to 110 percent of the 
     Medicare reimbursement rate would increase total federal-
     state costs $50 million more.
       This proposed change in the federal reimbursement rate 
     likely would reduce the number of plans that are offered to 
     persons on Medicare, resulting in increased premiums and 
     reduced services and access to service providers. Seniors in 
     rural Idaho already have trouble finding providers who accept 
     Medicare patients. Should these changes be approved, that 
     trend could continue statewide--severely limiting access to 
     medical care for some of Idaho's most vulnerable residents.
       The people of Idaho have entrusted us with a responsibility 
     to use our government resources wisely and efficiently. 
     Imposing costly federal mandates that cannot be sustained in 
     the long run is an irresponsible violation of this public 
     trust. Quite simply, these proposals are financially 
     irresponsible and would not adequately address the needs of 
     senior citizens and other vulnerable groups.
       I encourage you to join me in opposing current health care 
     reform proposals. By ending these nonsensical debates and 
     stopping the proposed reforms, we can move forward in a more 
     positive, measured and reasonable direction, using common 
     sense to find a workable healthcare solution that benefits 
     all Americans.
           As Always--Idaho, ``Esto Perpetua,''
                                             C.L. ``Butch'' Otter,
     Governor.
                                  ____



                                         State of Mississippi,

                                                September 8, 2009.
     Hon. Roger Wicker,
     U.S. Senate, Russell Senate Office Building, Washington, DC.
       Dear Senator Wicker: Governors across the nation are 
     growing increasingly concerned about the financial strain 
     rising healthcare costs are putting on state budgets. During 
     the National Governors Association (NGA) meeting in July, 
     governors--both Republicans and Democrats--formalized their 
     opposition to current Congressional reform proposals by 
     issuing a policy opposing unfunded mandates that shifts costs 
     to the states. This will necessarily require almost all 
     states to raise taxes to manage this burden. In Mississippi, 
     the issue of Medicaid expansion hits close to home, since our 
     state's share of the Medicaid program is currently $707 
     million, or 12 percent of a $5.87 billion state-supported 
     budget, which includes temporary stimulus funds.
       Nevertheless, the current proposals, both in the House and 
     Senate, will expand the Medicaid program at additional costs 
     paid not by the federal government, but passed down to the 
     states. After a call with the governors representing the NGA 
     Healthcare Task Force and the Senate Finance Committee, 
     Chairman Baucus told the news

[[Page 23381]]

     media it would be impossible for the federal government to 
     pick up all the costs for new Medicaid recipients; thus, 
     states would have to bear some of the costs.
       Why? Although CBO appears to estimate that H.R. 3200 will 
     cost more than $1 trillion over the next ten years, the fine 
     print reveals the true cost would be much higher. By imposing 
     tax increases early in the budget window, before the bulk of 
     the spending occurs, the true cost of the bill is hidden by 
     budget gimmickry. Delaying the implementation of the program 
     until the fourth year also uses budget tricks effectively to 
     hide the immense long-term cost of this proposal. CBO has 
     projected a 10-year deficit of more than $200 billion 
     associated with the bill as is. However, when the full cost 
     of the bill is taken into account after it is fully 
     implemented, the spending in the bill skyrockets to nearly $2 
     trillion over 10 years (2014-23) with a deficit of more than 
     $600 billion. I have included an attachment showing the 
     scoring of H.R. 3200 the only comprehensive health care 
     reform bill CBO has scored.
       According to the National Association of State Budget 
     Officers, Medicaid expenses in 2007 for federal and state 
     government combined were $336 billion. This number is 
     projected to reach $523 billion by 2013, a 56 percent 
     increase in just six years. Should the reforms being debated 
     in Congress become law, Mississippi would be saddled with an 
     average increase of $360 million in additional costs, on top 
     of the already $707 million it costs to fund Mississippi's 
     annual state share of the Medicaid program. These proposals, 
     which would cover all individuals at 133 percent federal 
     poverty level (FPL), will burden state budgets, forcing 
     states to raise taxes. In Mississippi, that would necessarily 
     mean increases in our state income or sales tax rates. 
     Mississippi, like so many states, simply can't afford to pick 
     up the tab for another unfunded mandate passed by Congress.
       Such state tax increases would be on top of the federal tax 
     increases already included in the House and Senate bills, 
     like huge tax increases on small businesses whether in the 
     form of an additional 8 percent payroll tax or a 5.4 percent 
     income tax surcharge. During a deep recession, when most 
     people believe job creation and economic growth should be top 
     priorities, huge tax increases will make it more expensive to 
     employ people; consequently, employers will employ fewer 
     people.
       Medicare, the nation's largest provider of health coverage 
     for the elderly and people with disabilities covering over 46 
     million Americans, is on the chopping block. CBO has 
     estimated that provisions in H.R. 3200 would lead to a total 
     of $162.2 billion in cuts being taken from Medicare Advantage 
     plans. This $162.2 billion impacts 11 million people and 
     represents nearly $15,000 in new costs passed to every 
     Medicare Advantage senior beneficiary. These harmful and 
     arbitrary cuts could result in Medicare Advantage plans 
     dropping out of the program, harming beneficiary choice, and 
     causing millions of seniors to lose their current coverage. 
     Moreover, the bill grants federal bureaucrats the power to 
     eliminate the Medicare Advantage program entirely, making the 
     oft-repeated statement, ``if you like your plan you can keep 
     it,'' ring hollow for seniors.
       Lastly, if we are trying to make health care more 
     affordable, how do you leave out tort reform? After all, 
     litigation and the resulting practice of defensive medicine 
     add tens of billions to the cost of health care. In 
     Mississippi we passed comprehensive tort reform in 2004, 
     partially to stop lawsuit abuse in the area of medical 
     liability. It worked. Medical liability insurance costs are 
     down 42 percent, and doctors have received an average rebate 
     of 20 percent of their annual paid premium. The number of 
     medical liability lawsuits against Mississippi doctors fell 
     almost 90 percent one year after tort reform went into 
     effect. Doctors have quit leaving the state and limiting 
     their practices to avoid lawsuit abuse.
       With all the issues concerning a government-run health care 
     system, I wanted to warn you of the state tax increases 
     Mississippi will shoulder on top of the federal tax increases 
     in the pending bills as well as my concern for the increased 
     costs our senior citizens will face as Medicare Advantage is 
     cut. Congress must slow down and work in a bipartisan manner. 
     Everybody agrees that health reform is needed, but it should 
     be done thoughtfully. I hope you'll keep this important 
     information in mind when proposals that shift costs to 
     states--or to our senior citizens--are considered.
           Sincerely,
                                                    Haley Barbour,
                                                         Governor.

  The ACTING PRESIDENT pro tempore. The Senator from Alaska.

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