Gov. Phil Bredesen is taking the lead among the nation’s governors in warning Congress against forcing states to pay a significant chunk of the cost of health care reform.
Bredesen, co-chair for health care policy for the National Governor’s Association, is objecting to a provision in House and Senate bills to expand Medicaid to cover anyone with incomes less than 133 percent of the poverty level, or $29,327 for a family of four.
Since states pay roughly one third of Medicaid, the provision could add billions of dollars in costs to state governments. Bredesen calls it “the mother of all unfunded mandates,” and he’s been making his case to reporters for weeks now at every opportunity.
“We can’t print money,” he says. “We can’t borrow money. A lot of staffers in Congress really don’t understand this idea of a balanced budget.”
The governor, a former HMO executive, says he favors universal health care, but not if that means added expense to Tennessee’s state government, which already is saddled with a $1 billion annual revenue loss because of the economic meltdown.
“This couldn't come at a worse time for the states,” he says.
The federal government would pick up the new Medicaid costs for two years under bills before Congress. But after that, states would have to pay some of the cost of newly eligible Medicaid recipients.
Governors from both political parties are complaining.
In a letter to the Senate, Indiana Republican Gov. Mitch Daniels said: “States will likely have to pick up the tab for this extension of Medicaid. We have estimated that the price for Indiana could reach upwards of $724 million annually.
“These additional costs will overwhelm our resources and obliterate the reserves we have fought so hard to protect.”
For Tennessee, the extra cost could reach $1.2 billion, according to Sen. Lamar Alexander. To raise that money, he said the state would either have to cut education and health care programs or impose an income tax.
“The discussion has been that the federal government will take that over for a few years and then will shift that back to the states,” Alexander said in a speech on the Senate floor. “Well, my response is that every senator who votes for such a thing ought to be sentenced to go home and serve as governor of his or her state for eight years and figure out how to pay for it or manage a program like that.
“In our state, we talk about money. Up here, a trillion here, a trillion there,” he added. “But $1.2 billion in the state of Tennessee equals to about a 10 percent income tax on what the people of Tennessee would bring in. We do not have an income tax. So that would be a new 10 percent income tax.”
Health care reform advocates say critics are unduly alarmed and exaggerating the actual costs to the states. Even if states are required to pay more for Medicaid, advocates say, they will ultimately save money if reform lowers health care costs.
“Health care is far too important an issue for our elected representatives to be demagoguing about it,” says Tony Garr, director of the Tennessee Health Care Campaign. “There are currently four different versions of health care reform legislation. Some keep all the cost at the federal level. Some would require states to take responsibility for the cost.
“No health care is free. Everyone is paying for health care, but not in a rational way.”
Garr said the most efficient way to improve health care is for everyone to get care in the right place, at the right time and in the right quantity.
“Forcing uninsured working people to go to the emergency room is not the right place, time or quantity,” he said. “Ultimately, health care reform will save Tennesseans hundreds of millions of dollars every year.”