States are forced to pay for measures they can't afford

States are forced to pay for measures they can't afford

Posted: Friday, February 25, 2011

Less than a year since Congress passed the health overhaul law, the government is handing out hundreds and hundreds of waivers exempting a favored few from some of its expensive and burdensome provisions.

And the line gets longer every day as more people face the law’s cost and impact. This is one more indication there are serious problems with this law.

All of these waivers come as no surprise, really. To get the legislation passed, the White House had to hand out countless special favors to buy votes — such as the legendary Cornhusker Kickback, the Louisiana Purchase, and Gator Aid, to name a few. Even with these backroom deals, the legislation barely got enough votes to pass. Now that it’s law, the special deals just keep on coming.

States are clamoring loudest for relief. In fact, 28 of them are challenging the law’s constitutionality in the courts. Even more have sent letters to Congress and the administration asking to escape its costly Medicaid mandates.

And at least four states have requested and received waivers to protect health insurance for state employees — despite the fact that the waivers don’t meet new federal tests. McDonald’s, Harley-Davidson, Jack in the Box, and a disproportionate number of labor unions are among nearly 1,000 others who have joined this waiver line.

The states are pleading with Washington to allow them to reduce the number of people on their Medicaid rolls. With states facing billions in revenue shortfalls, they are desperate to find ways to balance their budgets — as most state constitutions require.

They say they need to be able to trim their Medicaid rolls now because their state budgets are in such dire straits — partly because stimulus funding that helped pay for added Medicaid enrollment ends in June.

But their hands are tied without approval from Washington since they agreed to keep Medicaid enrollment at the same level in exchange for the federal funds.

To make matters worse, Health and Human Services Secretary Kathleen Sebelius is expected soon to provide “guidance” on how much states must pay doctors and hospitals treating Medicaid patients.

But that’s only the beginning. When the law fully kicks in, states must expand Medicaid to all citizens with incomes up to 133 percent of the federal poverty level — nearly $30,000 for a family of four.

While Washington will pay for most of this “expansion” population, the states expect millions more people to enroll who won’t get the full federal payment. Texas and Alaska are threatening to leave Medicaid altogether rather than face these costs.

Sebelius is given enormous power in the health law’s 2,801 pages. There are more than 2,000 references to specific powers she has to make decisions about how the law will be implemented. So far, she seems to be using little of that power to give states the flexibility they need.

Her predecessor, Mike Leavitt, says that the health overhaul law “puts more power than is prudent in the hands of one person, and it is not an answer to our national health-care crisis.”

He advises her to “use these expanded discretionary powers to grant states and the private sector more flexibility and more autonomy. Competition, innovation and new models of providing care and expanding coverage are the only ways we will reverse the dangerous course of future health spending. That simply cannot be done from Washington.”

Leavitt, a former Republican governor of Utah, argues that states need much greater flexibility in how they set up their health exchanges and in how they organize their Medicaid programs.

But that does not appear to be the approach the administration is taking. The law’s centralized, top-down approach grabs more and more power for Washington while putting states under the federal thumb. This defines the essence of the constitutional battle that will be waged until 2012.

• Turner is president and founder of the Galen Institute, which is funded in part by the pharmaceutical and medical industries.



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