The Right Prescription
Health Care Overhaul Threatens States
The Democrats’ proposed health care overhaul raises federalism concerns and burdens cash-strapped states with hundreds of billions of dollars in new spending obligations.
Even as California struggles with a catastrophic fiscal crisis and other states scramble to avoid the same fate, Democrats in Washington are proposing health care measures that would add hundreds of billions of dollars of spending to state budgets.
Thus far, very little of the debate surrounding the push to overhaul the nation’s health care system has focused on the federalism concerns raised by several provisions within legislation pending in Congress. Taken together, the measures will impose a raft of new financial and regulatory obligations on individual states.
Most directly, Democratic plans to extend health care coverage to all Americans are contingent on a massive expansion of Medicaid. The program, which covers about 40 million people now, would gain 15 million to 20 million new beneficiaries if Democrats get their way.
The Congressional Budget Office pegged the cost of such an expansion at $500 billion over 10 years, but the total cost is likely higher because the estimate only counts the projected burden on the federal government. Under the current arrangement, Washington picks up about 57 percent of the cost of Medicaid and states pay for 43 percent. While the latest draft of the bill by the Senate Health, Education, Labor and Pensions (HELP) Committee has the federal government subsidizing the Medicaid expansion for the first five years, after that, the burden will gradually shift back to the states.
“There’s an air of unreality here,” said Sen. Lamar Alexander, a member of the HELP committee. “The language is, ‘we’ll shift it back to the states’ as if the states had the money or a printing press. But this isn’t just a little increase. This is a bankrupting increase for most states.”
Alexander, who had to balance a state budget when he served as governor of Tennessee, quipped, “Any Senator that votes to expand Medicaid the way it is currently being proposed in Democratic bills ought to be sent home to serve as governor for eight years and try to manage the program.”
He said that financing this Medicaid increase would require Tennessee to introduce a new 10 percent state income tax. He also noted that as it is, the economic stimulus package passed in February already expanded Medicaid by $85 billion over two years, imposing costs on the states thereafter.
Ray Scheppach, executive director of the National Governors Association, testified before the committee last month that the state executives were concerned about the proposed expansion.
“Governors oppose changes to the Medicaid program that will result in an unfunded mandate imposed on the states,” Scheppach said. “Any increase in the mandatory minimum eligibility threshold will cost states tens of billions of dollars per year.”
Another problem posed by the Medicaid expansion involves access. If Congress approves lower payments to doctors to cut the cost of the program, it means that more providers will stop accepting Medicaid patients and thus reduce the quality of available care.
Alexander proposed an amendment to the HELP bill (also known as the “Kennedy bill” after the committee’s chairman, Sen. Ted Kennedy) that would have prevented any Medicaid expansion from adding to the financial burden of the states. But Democrats struck it down, leaving the issue to be resolved in the Finance Committee, which oversees the program.
But Medicaid is only one of many areas in which Democrats seek to use the power of the federal government to impose their health care vision on states.
The Kennedy bill would also create health insurance exchanges called “Gateways” in every state, allowing individuals to use government subsidies to purchase a private health care plan or a new government-run plan. While the legislation claims to offer flexibility in how states set up the exchanges, any state that refuses to establish an exchange within four years will have one imposed from Washington.
Among the hundreds of new powers the unelected Secretary of Health and Human Services would be granted by the legislation is the authority to “establish and operate a Gateway” in a state that does not create one on its own. And once this happens, all of the new insurance regulations created by the legislation “shall become effective in such State, notwithstanding any contrary provision of State law.”
Every individual in the state would be required to purchase “qualifying” health insurance and employers would be forced to provide insurance or pay a tax. And once again, the HHS Secretary (currently Kathleen Sebelius) would be tasked with “establish(ing) criteria” to define “qualifying” coverage.
About the Author
Philip Klein is The American Spectator's Washington correspondent. You can follow him on Twitter at: http://twitter.com/Philipaklein
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Hank Rearden| 7.14.09 @ 8:03AM
Good article. I'm glad you mentioned Kennedy. Why anyone would take any of the legislation he wrote seriously is beyond me seeing as his biggest success in life was not being convicted of vehicular manslaughter. Remember, this is the same genius that Bush had author No Child Left Behind, a grand piece of legislation that is yet another unfunded mandate.
cary loos| 7.14.09 @ 11:23AM
Thank you for raising the "Federalism question."
I don't know what it will take to wake Americans up to this danger. Incombent protected sultans
will imposing their will where no contravening authority exists in opposition. We have witnessed this phenonenon in action since the "Great Society" programs of the sixties and it has only accelerated in the last six months. Let freedom ring and grant the States the stones to exercise their push back responsibility.
Lu Dumak| 7.14.09 @ 11:25AM
Our Representatives should be using the 10th and 14th amendment to fight this farce of Goverment health care. We should start by putting Kennedy on the health care he wants for the American people.
Pingback| 7.14.09 @ 3:01PM
The American Spectator : Health Care Overhaul Threatens States :: General Resources links to this page. Here’s an excerpt:
Pingback| 7.14.09 @ 3:06PM
ADF Alliance Alert » Health care overhaul threatens states links to this page. Here’s an excerpt:
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The American Spectator : Health Care Overhaul Threatens States | Tips From isabell links to this page. Here’s an excerpt:
Pingback| 7.14.09 @ 4:58PM
The American Spectator : Health Care Overhaul Threatens States links to this page. Here’s an excerpt:
Pingback| 7.14.09 @ 4:58PM
The American Spectator : Health Care Overhaul Threatens States links to this page. Here’s an excerpt:
Death is Americas salvation| 7.14.09 @ 5:06PM
Health care for all is a must, because you are not incontrol of your own destiny. The State decides if you live or die, and many will be euthanased, no longer productive, serves no purpose you have a destiny with death.
No more private insurance put public health to control who lives and who dies.
The planet is over populated, and must be reduced to under 3 Billion people, that is the Zionist policy. Nothing you can do about it Americans does not control America it's controled by Zionist.
All people who whish to be elected has to be confirmed by Zionist and swear an allegiance to APIAC and Israel.
America is the only country on earth that has to do that swear allegiance to a foreign body.
Pingback| 7.14.09 @ 5:50PM
The American Spectator : Health Care Overhaul Threatens States | My Health and Lifest links to this page. Here’s an excerpt:
Brittanicus| 7.14.09 @ 6:39PM
MEDICAL CARE SHOULD BE THE CHOICE OF EACH AMERICAN
The deciding factor in implementing health care for everybody--LEGALLY--in America, is the Publics voice? Those who want to just follow the same old road, can do so with the profit taking commercial insurance. Those who would be satisfied with a government run health care program, can now start demanding it from the lawmakers. Those who see a Universal health care system, similar to most developed countries in Europe, should start informing every Representative and Senate politician starting today. Rationing in places like England, was caused by the major impact of uncontrolled immigration.
Most American working class can do--without-- high premiums, pre-existing condition clauses. deductibles, co-pays that is representative of the wealthy medical care insurers. Whatever pertains to your family, you should start ruffling the indifferent feathers of the people in Washington at 202-224-3121 Just like illegal immigration , we cannot afford anymore to subsidize the business that hire them or the millions of illegal families.
Pingback| 7.14.09 @ 7:03PM
The American Spectator : Health Care Overhaul Threatens States | health links to this page. Here’s an excerpt:
Alan Brooks| 7.14.09 @ 7:13PM
NO POINT IN TRYING, THE TROLLS WILL DROWN YOU AT THIS BLOG.
we are just going through the motions now. game over
Alan Brooks| 7.14.09 @ 7:20PM
btw, AS is relative sanity in this misfired 21st century, but the cover photo of the guy-- even if he is a doctor-- holding a naked boy is okay but perhaps slightly unwise in the Age of Jacksonian democracy. we have to be nobler than Caesar's wife; this isn't the '80s; now we have to walk on eggs!
Alan Brooks| 7.14.09 @ 7:20PM
btw, AS is relative sanity in this misfired 21st century, but the cover photo of the guy-- even if he is a doctor-- holding a naked boy is okay but perhaps slightly unwise in the Age of Jacksonian democracy. we have to be nobler than Caesar's wife; this isn't the '80s; now we have to walk on eggs!
Alan Brooks| 7.14.09 @ 7:54PM
why am I upset about the trolls? look at the "America Will Die" posts. who does Daphne work for, anyway? Al Jazeera?
Pingback| 7.14.09 @ 10:06PM
Obama run healthcare crashes state budgets links to this page. Here’s an excerpt:
Finrir| 7.15.09 @ 12:53AM
Here I am, a 15 year old, concerned about this topic. Of cource people my age and younger should be concerned. The debt that this bill will put on our contry will leave me, my children, my grandchildren, and maybe even my great grandchildren left to pay it off. We will all be broke. I urge everyone old enough to urge their senators and representatives to vote NO on this bill, or you could consider this country destroyed. I for one, will move to either Canada or England later in life should this retardedness pass. It is simply a taxation overhaul.
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jordan 6 rings| 7.17.09 @ 4:52AM
Good article. I'm glad you mentioned Kennedy.
Pingback| 7.21.09 @ 1:15AM
House bill would destroy private insurance—and private medicine « AAPS News of the Da links to this page. Here’s an excerpt:
Richard Baker| 7.22.09 @ 4:38PM
Death is Americas salvation:
Are you volunteering to be one of the subjects of the population reduction you say must happen? May I be of assistance in your personal reduction?
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The ObamaCare Leviathan | Satelec 2003 links to this page. Here’s an excerpt:
Karl Lazar| 10.26.10 @ 3:12PM
As any expert will tell you, if you want to make sure everybody has at least basic insurance, at a reasonable price, and you want to do it primarily through private coverage, the individual mandate is essential. So unless you oppose the mandate from the left--that is, you prefer people get coverage from some kind of public insurance--to oppose the mandate is to oppose the idea that people with high medical risks deserve access to the best health insurance, at the same price, as people who are healthy. I know that's how a lot of conservatives feel. But that's now become a litmus test for the party's nomination? Whatever happened to compassionate conservatism?