[Congressional Record (Bound Edition), Volume 156 (2010), Part 1]
[Senate]
[Pages 1239-1241]
[From the U.S. Government Publishing Office, www.gpo.gov]




                       MEDICAID READJUSTMENT RATE

  Ms. LANDRIEU. Madam President, I know that under the previous 
arrangement, the Senator from Massachusetts will be giving his farewell 
remarks. I would like to speak for the next 4 minutes prior to him 
coming to the floor.
  I spoke on the floor earlier explaining to my colleagues and 
providing some additional information about the fair resolution the 
Senate came to to help Louisiana and any other State that would have 
been similarly impacted through a very difficult Medicaid readjustment 
rate. I spoke at length this morning about that.
  I want to show this chart that clearly outlines our particular and 
unique and disastrous situation. Since 1999, and before, the State of 
Louisiana--and the occupant of the chair was a Governor, so she knows--
paid approximately 30 percent of our Medicaid dollars and the Federal 
Government picked up about 70. We are in the lower one-third of States 
on a per capita basis and have been since the Civil War, and we remain 
that way to this day.
  What happened after Katrina and Rita was, because of the great 
generosity not only of this body and the Congress and the former 
President and the current President and private sector dollars--
billions and billions of dollars poured into our State, driving our

[[Page 1240]]

per capita income up an unprecedented 40 percent. That has never 
happened in the history of the Medicaid Program. The State that comes 
closest to a per capita increase, I believe--or several States 
increased by only 14 percent.
  The bottom line is, if our delegation had not sought some fix, some 
arrangement, some workout of this problem, the people of Louisiana, who 
have been impacted by the largest disaster in recent memory, would have 
had to pay $472 million more for basically the same program. The 
formula was flawed.
  The point I want to make in my final minute is this: I am proud to 
lead this effort to fix this. The effort was not a secret effort; it 
was a public effort--called for by the Republican Governor, Bobby 
Jindal, in a press conference 2 weeks before Barack Obama was sworn in 
as President--to talk about this issue in a public forum, not a private 
forum. It was not a last-minute effort; it started a year ago. It was 
not a special deal for me; it was a timely and fair resolution for the 
people of Louisiana--one which they still deserve.
  The consequences of failure, in my final 15 seconds, are that the 
people of Louisiana, if this is not fixed--a health care issue on a 
health care bill--if it is not fixed, the people of Louisiana will have 
to either cut $472 million out of our budget this year--and that is a 
lot of money out of a budget, even by Washington standards--or raise 
taxes.
  I will continue to come to the floor to speak proudly, openly, and 
forcefully about this issue. I thank the Senator from Massachusetts for 
allowing me to clarify a few points.
  I ask unanimous consent to have a group of documents printed in the 
Record to substantiate what I have said today.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

         State of Louisiana, Department of Health and Hospitals, 
           Office of the Secretary,
                                   Baton Rouge, LA, April 6, 2009.
     Hon. Charles E. Johnson,
     Interim Secretary, U.S. Department of Health and Human 
         Services, Washington, DC.
       Dear Secretary Johnson: Since Hurricanes Katrina and Rita 
     struck the gulf coast in 2005, several federal agencies, 
     including the Department of Health and Human Services, have 
     contributed significant financial resources in the recovery 
     effort. Many of the initiatives continue, and we are grateful 
     for the ongoing work being done by HHS to assist Louisiana.
       I write today to share with you what seems to be an 
     unintended consequence of the bold financial initiatives 
     undertaken since 2005. Billions of dollars have been infused 
     into Louisiana's economy following the damage caused by the 
     failure of the federal levee system--dollars for which we are 
     grateful, but which we also know are temporary by their 
     nature. Unfortunately, as calculations are performed by the 
     federal government to determine federal participation for 
     Medicaid, it has become clear the federal formula for 
     estimation of federal match for Louisiana has become 
     significantly artificially skewed by the infusion of these 
     dollars into the calculation of per-capita income.
       Louisiana's federal match for Medicaid typically has been 
     expected to range somewhere between 69.6 percent and 73 
     percent with very small variations from year-to-year. 
     However, according to forecasts provided by Federal Funds 
     Information to States (FFIS), and our own calculations, it 
     appears our FMAP will decline for FFY 10 from its current 
     nearly 72 percent to 67.6 percent, and then again for FFY 11 
     to 63.1 percent. Similarly, our enhanced match for CHIP will 
     decline from 80 percent to 74 percent. According to FFIS, 
     these calculations are based on what appears to be a 42 
     percent increase in Louisiana's per-capita income from 2005-
     2007--an increase otherwise not typical by any reasonable 
     definition of income without the inclusion of the multitude 
     of one-time recovery dollars included by the BEA in their 
     calculations.
       The federal formula for FMAP is deliberately established by 
     Congress to utilize a three-year running average so as to 
     avoid such sudden spikes or decreases. Even with such 
     safeguards, however, Louisiana is facing the largest decrease 
     in FMAP in the nation, and at an alarming rate, based on 
     currently forecast expenditures, which assume significant 
     current-year and proposed reductions in spending for the next 
     fiscal year, the lost federal match will annualize to an 
     estimated $700 million. Importantly, this lost federal 
     revenue is net of the stimulus--meaning it is a reduction 
     from our Medicaid program in addition to the reduction that 
     will take place when the stimulus expires.
       The projected major reduction in FMAP will converge by 
     January, 2011 to pose a cataclysmic challenge upon the 
     expiration of the stimulus. Many states are in a position to 
     plan for the loss of stimulus dollars, particularly if their 
     FMAP is remaining in a static state. In fact, FFIS estimates 
     21 states will see an increase in their FMAP in FFY 11, while 
     other states are protected by the floor. However, with 
     Louisiana literally going from an 80 percent stimulus FMAP 
     rate to a 63 percent FMAP beginning in January, 2011, the 
     sudden decrease is simply not manageable without a sudden and 
     dramatic blow to our program, its providers and, most 
     importantly, to the 26 percent of our population--mostly 
     children--who rely upon the financial solvency of the 
     program.
       Louisiana has a very honored tradition of enrolling our 
     lowest income children in health coverage, with only 5 
     percent of our children currently being estimated to be 
     without coverage. Thanks in large part to the approval of 
     HHS, we expanded access to children up to 250 percent of the 
     federal poverty level in January, 2008, and have enrolled 
     more than 25,000 additional children in our programs since 
     that time. We have been singled out as the state that has the 
     best track record of retaining these children in coverage. 
     Clearly, Governor Jindal is committed to making additional 
     progress in improving the health outcomes for our population, 
     but such significant reductions in federal funding--
     particularly resulting as a consequence of our hurricane 
     recovery--can only disrupt this program. . . .
                                  ____

                                      Washington, DC, May 4, 2009.
     Secretary Kathleen Sebelius,
     Department of Health and Human Services,
     Washington, DC.
       Dear Secretary Sebelius: We write to you today to follow up 
     on an April 9 letter to your office from Louisiana Department 
     of Health and Hospitals Secretary Alan Levine regarding 
     potential reductions to Louisiana's Medicaid Federal Medical 
     Assistance Percentage (FMAP).
       While many states will face challenges to their Medicaid 
     programs in the coming years, we believe that Louisiana's 
     case is unique. As you may be aware, our state is still 
     rebuilding from Hurricanes Katrina and Rita in 2005 as well 
     as Hurricanes Gustav and Ike in 2008, including the 
     rehabilitation of the healthcare system in the New Orleans 
     area. These extensive recovery efforts have inflated 
     Louisiana's per capita income, but were only temporary and do 
     not accurately reflect the increases to incomes in industries 
     not related to hurricane recovery.
       Since the FMAP formula uses per capita income to calculate 
     how much each state will receive in Medicaid funding, we are 
     greatly concerned that the post-hurricane per capita income 
     increases could significantly impact our state's FMAP 
     allocation. We ask that you meet with Secretary Levine to 
     develop a solution to the unique problem that is facing our 
     state.
           Sincerely,
         Mary Landrieu, U.S. Senator; Rodney Alexander, Member of 
           Congress; Charlie Melancon, Member of Congress; Bill 
           Cassidy, Member of Congress; David Vitter, U.S. 
           Senator; Charles Boustany, Member of Congress; Steve 
           Scalise, Member of Congress; John Fleming, Member of 
           Congress; Anh ``Joseph'' Cao, Member of Congress.
                                  ____


                  Senate Concurrent Resolution No. 137

       Whereas, in 2005 and 2008, Louisiana was struck by 
     hurricanes Katrina, Rita, Gustav, and Ike, collectively 
     requiring billions of dollars of federal and private 
     assistance to the state; and
       Whereas, the people of Louisiana are grateful for the 
     support of the American people and of the United States 
     Congress as the state is recovering from these catastrophic 
     events; and
       Whereas, coastal states, such as Florida, Mississippi and 
     Texas, and other states, such as Iowa, have recently 
     experienced significant disasters related to either 
     hurricanes or flooding, and coastal states can reasonably 
     expect to experience similar calamities in the future; and
       Whereas, after a disaster resulting in massive and wide 
     spread damage to public and private property, economic 
     activity may temporarily significantly increase as the state 
     and local communities endeavor to rebuild; and
       Whereas, due to the increased economic activity resulting 
     from hurricanes Katrina and Rita, Louisiana's per capita 
     personal income saw an unusual and extraordinary increase of 
     forty-two percent from 2005 through 2007; and
       Whereas, the per capita personal income for Louisiana grew 
     by six point eight percent from 2000 through 2005; and
       Whereas, the bureau of economic analysis of the U.S. 
     Department of Commerce stated in its 2007 report entitled 
     State Personal Income, that ``Louisiana grew ten point five 
     percent in 2007, down from twenty point six percent in 
     2006,'' and that ``these growth rates are substantially 
     higher than any other state''; and
       Whereas, the bureau further reported that, ``the rental 
     income component of Louisiana personal income was boosted by 
     five point four billion dollars of Road Home subsidies from 
     the U.S. Department of Housing and

[[Page 1241]]

     Urban Development,'' and that much of the per capita personal 
     income gain in Louisiana ``is accounted for by the Road Home 
     subsidies which average nearly twelve hundred fifty dollars 
     per Louisiana resident''; and
       Whereas, evidence shows that even though the per capita 
     personal income had grown by forty-two percent from 2005 
     through 2007, median income has remained stable which 
     indicates that real personal income has not grown in a 
     sustained way; and
       Whereas, the bureau of economic analysis captures not only 
     the economic activity generated by the receipt of government 
     disaster relief payments but receipt of insurance payments 
     that would not have occurred but for the hurricanes--activity 
     which, when included in the overall calculations of per 
     capita personal income are extremely difficult to 
     disaggregate for attribution to specific causes as the 
     spending percolates throughout the economy; and
       Whereas, the increased economic activity in Louisiana in 
     2006 and 2007 is clearly a direct result of the rebuilding 
     that occurred in the aftermath of hurricanes Katrina and Rita 
     and this economic activity led to a corresponding increase in 
     per capita personal income in Louisiana in 2006 and 2007; and
       Whereas, accurate considerations of per capita personal 
     income are important because federal law establishes the 
     formula by which the FMAP for each state is determined based 
     on a comparison of each states per capita personal income to 
     the per capita income personal income of the United States as 
     calculated by the bureau of economic analysis; and
       Whereas, when a state's per capita personal income 
     increases relative to the average of the United States, the 
     state's FMAP decreases; and
       Whereas, according to the federal formula, the increase in 
     per capita personal income in Louisiana in 2006 and 2007 will 
     have the unintended consequence of reducing Louisiana's FMAP 
     for federal fiscal years 2010 and 2011; and
       Whereas, Louisiana's FMAP will decrease to 67.61% in 
     federal fiscal year 2010 and to 63.16% in federal fiscal year 
     2011, a total decrease of 6.53% over two years, the largest 
     decline of any state; and
       Whereas, Louisiana's FMAP is temporarily enhanced to eighty 
     percent as a result of the enactment of the American Recovery 
     and Reinvestment Act of 2009 (ARRA), but that enhanced FMAP 
     will terminate on December 31, 2010; and
       Whereas, Louisiana's FMAP will drop precipitously from 
     eighty percent to sixty-three point sixteen percent on 
     January 1, 2011, and this loss in federal match will 
     annualize to approximately one billion dollars; and
       Whereas, Louisiana has demonstrated a significant 
     commitment to its programs for providing health care access 
     to the poor by investing in substantial sums of state general 
     fund dollars through Medicaid, SCHIP and a statewide system 
     of public hospitals, all of which to combine to provide a 
     safety net for a state with low income and significant 
     provider access problems, and such a drastic reduction in 
     Louisiana's FMAP will have devastating impact on the state's 
     infrastructure for caring for the poor; and
       Whereas, the presumed purpose for using the per capita 
     personal income as a basis for the calculation of FMAP is to 
     ensure resources are directed to states which are more likely 
     to have low-income populations, and thus, a more significant 
     burden on the Medicaid program; and
       Whereas, Louisiana's Medicaid program has not seen a 
     decrease in enrollment after hurricanes Katrina and Rita, but 
     rather an increase, and thus, from an economic perspective, 
     it is clear the purpose for utilizing per capita personal 
     income as the primary driver of the state's FMAP cannot be 
     accurately and fairly applied to Louisiana during the period 
     following the temporary increase in economic activity; and
       Whereas, the Louisiana Legislature does not accept that it 
     is the intention of the United States Department of Health 
     and Human Services or the United States Congress, through an 
     artifact of the FMAP formula, to financially penalize 
     Louisiana and other states working to rebuild their 
     communities after major disasters. Therefore, be it
       Resolved, That the Legislature of Louisiana memorializes 
     the Congress of the United States to enact legislation to 
     adjust the Federal Medical Assistance Percentage rules to 
     ameliorate the unintended negative impact caused by the 
     infusion of disaster relief funding, both public and private, 
     into Louisiana's and other state's economies following major 
     disasters. Be it further
       Resolved, That a copy of this Resolution shall be 
     transmitted to the secretary of the United States Senate and 
     the clerk of the United States House of Representatives and 
     to each member of the Louisiana delegation to the United 
     States Congress.

  Ms. LANDRIEU. Madam President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Massachusetts is recognized.
  Mr. KIRK. Madam President, I ask unanimous consent to speak for the 
time I may consume.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________