Republicans shift focus to Medicaid complaints

President Barack Obama is offering to let states unhappy with his health care overhaul design their own plans as long as they fulfill the goals of his landmark law. (Feb. 28)
Washington Post Staff Writer
Tuesday, March 1, 2011; 11:39 PM

A day after President Obama said he would support amending the health-care law so states can opt out of key provisions sooner, Republicans sought to shift the rhetorical battle back to an issue that would be largely unaffected by the president's proposal: the impact of the law's Medicaid requirements on state budgets.

Testifying at a hearing of the House Energy and Commerce Committee on Tuesday, two Republican governors returned to themes that had dominated the discussion at the National Governors Association's semiannual meeting over the weekend.

Mississippi Gov. Haley Barbour and Utah Gov. Gary R. Herbert complained that by prohibiting states from limiting who is eligible for Medicaid, the law has locked them into unsustainable spending at a time of fiscal crisis.

"Worst of all," added Herbert, is the law's mandatory expansion of Medicaid to cover a larger share of the poor beginning in 2014.

"Medicaid is poised to wreak havoc on the state's budget for years to come," he said, "threatening our ability to fund critical services, such as transportation and education."

To buttress that argument, congressional Republicans unveiled a report by the committee's majority staff estimating that the Medicaid expansion would cost states $118 billion through 2023 - a substantially larger amount than recent estimates by the Congressional Budget Office and independent analysts that consider a shorter time frame.

At the hearing, the committee's chairman, Rep. Fred Upton (R-Mich), pronounced the finding "sobering."

But administration officials countered that the additional expense to states will be largely offset because the law also enables states to save on Medicaid.

"It's important to remember that the Affordable Care Act will cover the overwhelming majority of the costs associated with the Medicaid expansion and will, in fact, reduce the amount states spend to care for the uninsured," White House spokesman Jay Carney told reporters.

Massachusetts Gov. Deval L. Patrick, the only Democrat invited to speak at the hearing, sounded a similar note in his testimony. "Federal reform is good for Massachusetts," he said. "It has given us an affordable way to extend the promise of coverage to Massachusetts residents."

Medicaid, which is jointly funded by states and the federal government, now provides health insurance to 53 million poor Americans. Starting in 2014, the law will require states to open eligibility to an anticipated 20 million more people with slightly higher incomes.

At first, the federal government will fully fund the extra cost. But beginning in 2017, the states' share will gradually increase to 10 percent by 2020.

The report released Tuesday - which was jointly produced with Republican staff of the Senate Finance Committee - arrived at its grand total by compiling and extrapolating from separate estimates provided by governments of each state as well as outside experts.

These figures do not appear to include an analysis of several potential sources of savings to states identified by researchers. A recent report by analysts at the Urban Institute calculated these savings could range from $40.6 billion to $131.9 billion between 2014 and 2019.

For example, the expansion of Medicaid coverage to a greater share of the uninsured could enable states and local governments to cut back on funding they now provide hospitals and other providers for treating patients who are unable to pay. Similarly, states whose Medicaid programs now cover people with incomes above the minimum required by the law could shift those people to state-run marketplaces, through which they will be able to buy insurance plans with federal subsidies.

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