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Last week, I reported on how health care legislation posed a threat to states, and this turned into a major concern of nations' governors as they met in Biloxi over the weekend. As I noted, all of the major Democratic bills envision a massive expansion of Medicaid which would add 15  million to 20 million to the rolls of a program that is already bankrupting the states. Generally, the federal government covers 57 percent of the cost of Medicaid and the states pick up the remaining 43 percent. But while the House Democrats bill would have the federal government fund the cost of the expansion, the Senate Health, Education, Labor and Pensions (HELP) Committee would only cover it for the first five years -- after which point the states will be on the hook for hundreds of billions of more dollars. The New York Times article, quotes Democratic Gov. Phil Bredesen of Tennessee as saying Congress was creating “the mother of all unfunded mandates.” He added, "“Medicaid is a poor vehicle for expanding coverage...It’s a 45-year-old system originally designed for poor women and their children. It’s not health care reform to dump more money into Medicaid.”

And though the Times doesn't note this, he speaks from experience. In 1994, Tennessee expanded Medicaid coverage as part of a health care reform effort, but by 2003 its health care system was deemed “not financially viable” and Bredesen was forced to rein in the program.

Of course, the Medicaid issue isn't the only thing that should be concerning governors. As I described in detail in last week's article, the HELP bill also creates bestows hundreds of new powers on the unelected Secretary of Health and Human Services, and it would force every state to create an insurance exchange within for years, or else have the Secretary step in and set one up for the state.