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66–822 PDF 2011

THE CONSEQUENCES OF OBAMACARE: IMPACT 

ON MEDICAID AND STATE HEALTH CARE REFORM 

HEARING 

BEFORE THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

MARCH 1, 2011 

Serial No. 112–11 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

COMMITTEE ON ENERGY AND COMMERCE 

FRED UPTON, Michigan 

Chairman 

JOE BARTON, Texas 

Chairman Emeritus 

CLIFF STEARNS, Florida 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

MARY BONO MACK, California 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE ROGERS, Michigan 

SUE WILKINS MYRICK, North Carolina 

Vice Chair 

JOHN SULLIVAN, Oklahoma 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

BRIAN P. BILBRAY, California 

CHARLES F. BASS, New Hampshire 

PHIL GINGREY, Georgia 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BILL CASSIDY, Louisiana 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

CORY GARDNER, Colorado 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

HENRY A. WAXMAN, California 

Ranking Member 

JOHN D. DINGELL, Michigan 

Chairman Emeritus 

EDWARD J. MARKEY, Massachusetts 

EDOLPHUS TOWNS, New York 

FRANK PALLONE, JR., New Jersey 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANICE D. SCHAKOWSKY, Illinois 

CHARLES A. GONZALEZ, Texas 

JAY INSLEE, Washington 

TAMMY BALDWIN, Wisconsin 

MIKE ROSS, Arkansas 

ANTHONY D. WEINER, New York 

JIM MATHESON, Utah 

G.K. BUTTERFIELD, North Carolina 

JOHN BARROW, Georgia 

DORIS O. MATSUI, California 

(II) 

(III) 

C O N T E N T S 

Page 

Hon. Fred Upton, a Representative in Congress from the State of Michigan, 

opening statement ................................................................................................ 2 

Prepared statement .......................................................................................... 3 

Hon. Henry A. Waxman, a Representative in Congress from the State of 

California, opening statement ............................................................................. 6 

Prepared statement .......................................................................................... 31 

Hon. Joseph R. Pitts, a Representative in Congress from the Commonwealth 

of Pennsylvania, opening statement ................................................................... 34 

Prepared statement .......................................................................................... 35 

Hon. Frank Pallone, Jr., a Representative in Congress from the State of 

New Jersey, opening statement .......................................................................... 38 

Hon. Cliff Stearns, a Representative in Congress from the State of Florida, 

prepared statement .............................................................................................. 186 

Hon. Cathy McMorris Rodgers, a Representative in Congress from the State 

of Washington, prepared statement ................................................................... 187 

Hon. Cory Gardner, a Representative in Congress from the State of Colorado, 

prepared statement .............................................................................................. 189 

Hon. John D. Dingell, a Representative in Congress from the State of Michigan, prepared statement ...................................................................................... 191 

Hon. Edolphus Towns, a Representative in Congress from the State of New 

York, prepared statement .................................................................................... 192 

Hon. Bobby L. Rush, a Representative in Congress from the State of Illinois, 

prepared statement .............................................................................................. 193 

Hon. Eliot L. Engel, a Representative in Congress from the State of New 

York, prepared statement .................................................................................... 197 

Hon. Lois Capps, a Representative in Congress from the State of California, 

prepared statement .............................................................................................. 201 

WITNESSES

Gary R. Herbert, Governor, State of Utah ............................................................ 41 

Prepared statement .......................................................................................... 44 

Answers to submitted questions ...................................................................... 205 

Deval Patrick, Governor, Commonwealth of Massachusetts ............................... 64 

Prepared statement .......................................................................................... 67 

Answers to submitted questions ...................................................................... 210 

Letter to Mr. Cassidy, dated March 23, 2011 ................................................ 224 

Haley Barbour, Governor, State of Mississippi ..................................................... 79 

Prepared statement .......................................................................................... 81 

Answers to submitted questions ...................................................................... 227 

SUBMITTED MATERIAL

Reports on The Benefits of Health Care Reform in Massachusetts, Mississippi, and Utah, March 2011, submitted by Mr. Waxman ........................... 7 

Letter of February 3, 2011, from Kathleen Sebelius, Secretary, Department 

of Health and Human Services, to Governors, with Medicaid Cost-Savings 

Opportunities report, submitted by Mr. Waxman ............................................. 16 

Letter of February 24, 2011, from Marina L. Weiss, PhD, Senior Vice President, Public Policy and Government Affairs, March of Dimes, to committee 

leadership, submitted by Mrs. Capps ................................................................. 115 

Statement of Pat Quinn, Governor, State of Illinois, dated March 1, 2011, 

submitted by Ms. Schakowsky ............................................................................ 125 

Statement of Service Employees International Union, dated March 1, 2011, 

submitted by Mr. Waxman .................................................................................. 130 

Page

IV 

Statement of National Partnership for Women & Families, dated March 1, 

2011, submitted by Mr. Waxman ........................................................................ 132 

Statement of the American Orthotic and Prosthetic Association concerning 

Medicaid, dated March 1, 2011, submitted by Mr. Waxman ........................... 133 

Letter of March 2, 2011, from ACCSES et al. to Members of Congress, 

submitted by Mr. Waxman .................................................................................. 143 

Statement of the Pharmaceutical Care Management Association, dated March 

1, 2011, with February 2011 report ‘‘Potential Federal and State-by-State 

Savings if Medicaid Pharmacy Programs were Optimally Managed’’ by the 

Lewin Group, submitted by Mr. Bass ................................................................ 148 

Letter of March 1, 2011, from Robert F. McDonnell, Governor, Commonwealth 

of Virginia, to Republican leadership, submitted by Mr. Griffith .................... 177 

Letter of February 28, 2011, from Nathan Deal, Governor, State of Georgia, 

to Mr. Gingrey ...................................................................................................... 184 

(1) 

THE CONSEQUENCES OF OBAMACARE: IMPACT ON MEDICAID AND STATE HEALTH 

CARE REFORM 

TUESDAY, MARCH 1, 2011 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON ENERGY AND COMMERCE, 

Washington, DC. 

The committee met, pursuant to call, at 9:47 a.m., in room 2123 

of the Rayburn House Office Building, Hon. Fred Upton (chairman 

of the committee) presiding. 

Members present: Representatives Upton, Barton, Stearns, 

Whitfield, Shimkus, Pitts, Walden, Terry, Rogers, Myrick, Sullivan, 

Murphy, Burgess, Blackburn, Bilbray, Bass, Gingrey, Scalise, 

Latta, McMorris Rodgers, Harper, Lance, Cassidy, Guthrie, Olson, 

McKinley, Gardner, Pompeo, Kinzinger, Griffith, Waxman, Dingell, 

Markey, Towns, Pallone, Eshoo, Engel, Green, Capps, Doyle, 

Schakowsky, Gonzalez, Inslee, Baldwin, Weiner, Matheson, 

Butterfield, Barrow, and Matsui. 

Staff present: Gary Andres, Staff Director; Michael Beckerman, 

Deputy Staff Director; Mike Bloomquist, Deputy General Counsel; 

Allison Busbee, Legislative Clerk; Howard Cohen, Chief Health 

Counsel; Marty Dannenfelser, Senior Advisor, Health Policy and 

Coalitions; Andy Duberstein, Special Assistant to Chairman Upton; 

Paul Edattel, Professional Staff Member, Health; Julie Goon, 

Health Policy Advisor; Todd Harrison, Chief Counsel, O&I; Sean 

Hayes, Counsel, O&I; Debbee Keller, Press Secretary; Ryan Long, 

Chief Counsel, Health; Jeff Mortier, Professional Staff Member; 

Monica Popp; Professional Staff Member, Health; Heidi Stirrup, 

Health Policy Coordinator; John Stone, Associate Counsel; Phil 

Barnett, Democratic Staff Director; Jen Berenholz, Democratic 

Chief Clerk; Stephen Cha, Democratic Professional Staff Member; 

Brian Cohen, Democratic Investigations Staff Director and Senior 

Policy Advisor; Alli Corr, Democratic Policy Analyst; Tim 

Gronniger, Democratic Senior Professional Staff Member; Purvee 

Kempf, Democratic Senior Counsel; Karen Lightfoot, Democratic 

Communications Director, and Senior Policy Advisor; and Karen 

Nelson, Democratic Deputy Committee Staff Director for Health. 

Mr. UPTON. I would just note that some of the governors have 

been here in town for a couple of days. They are anxious to get 

back to their home States. We know that the airport is only minutes away, but because of that, we are going to be right on in terms 

of the clock, so expect a fast gavel for all of our members. 

2 

OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN 

Mr. UPTON. This month marks the 1-year anniversary of the 

President’s signing into law a pair of controversial health care bills 

that are transforming the way Americans receive and pay for 

health care. We convene this hearing today to hear from the governors about what impact the health care law has had on their 

States thus far and what they believe to be the toughest challenges 

we face in implementing the President’s health care reform package over the coming years. 

Medicaid currently covers nearly 54 million Americans, and the 

Administration’s chief health actuary has estimated that the Medicaid expansions included in the law could increase the Nation’s 

Medicaid rolls by at least 20 million beginning in 2014. 

While the President’s health care reform package altered the relationship that the Federal Government has had with the States by 

requiring that States drastically expand their Medicaid populations, governors are also deeply concerned about the new unfunded mandates in the law and their impact on current State 

budgets. 

The CBO estimates that these mandates and expansions will cost 

the States at least $60 billion but the States themselves estimate 

the cost to be nearly twice as much. Today I join members of the 

Senate Finance Committee to release the first comprehensive analysis of what the States themselves expect to spend as a result of 

the health care law and the results are sobering. Even using conservative estimates, the States expect to face an additional $118 

billion in costs through 2023 as a result of the law’s mandate. 

Today’s governors cannot afford to continue offering the same 

benefits in the same way to their existing Medicaid populations. 

However, the health care law puts them between a rock and a hard 

place. They cannot make eligibility changes in their options programs because the health care law freezes their current programs 

in place for years. 

This hearing will be an opportunity to hear from three of the Nation’s most thoughtful governors. Although as governors you are 

following very different roadmaps concerning health care reform, I 

believe that you can all agree that State innovation and flexibility 

are key. 

[The prepared statement of Mr. Upton follows:] 

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Mr. UPTON. I yield now 1 minute to Mr. Barton. 

Mr. BARTON. I thank you, Mr. Chairman, and I welcome our governors here, who right now are empty chairs but I am sure they 

will be here at the appropriate time. 

Mr. BARTON. I am going to put my entire statement in the 

record, Mr. Chairman. Simply put, this is the same old story, just 

a new chapter. We have heard year after year that we need more 

flexibility for our Medicaid partners at the State level. My Governor of Texas has sent a letter that I will put in the record at the 

appropriate time, and he points out that in Texas alone, Medicaid 

is going to be 25 percent of the entire budget, and over the next 

10 years it is going to cost an additional $27 billion in State 

matches to the Federal Government. 

So this is a very good hearing. I look forward to listening to the 

three governors today and working with all governors of the 50 

States to try to find a solution to help maintain this program and 

continue the benefit package but also find a way to impact the cost 

curve. 

Thank you, Mr. Chairman, for the hearing. 

Mr. UPTON. I yield the balance of my time to Dr. Burgess, 2 minutes. 

Mr. BURGESS. I thank the chairman and I thank the governors 

for being here. I know it is an extra effort on your part. I do want 

to thank the chairman for his commitment to listen to the States 

in this exercise because it is so critical what happens at the State 

level. 

Mr. BURGESS. There are a handful of people on this panel that 

have actually seen a Medicaid patient in their professional careers 

before coming to Congress. I am one of those. So when I point out 

the massive flaws in the system, it is not out of a lack of compassion but precisely the opposite. The Federal Government created 

this system to care for the poor and poorest in society but it has 

really now become an empty promise because oftentimes it is a 

bait-and-switch. The countercyclical nature of the program encourages growth in times of financial excess and then you are hit with 

maintenance of effort when the economy goes bad. Those with Medicaid find themselves unable to access services because Medicaid 

pays so much less than comparable services. Even Medicare pays 

better than Medicaid. 

If we were to start fresh with a blank sheet of paper, what would 

it look like? Would it look like it does today? And really, very few 

of us on this side doubt that it would. Time after time, providers 

cite the lower reimbursement the paperwork as the two more important reasons for limiting their participation, and then we expanded the situation without improving it, so we made it worse. 

Here is the question: Why do we even still have Medicaid in 2014? 

The answer is, some people involved in the genesis of the law 

signed a year ago didn’t care about how to provide the best care 

or how to coordinate or to get more people to purchase innovative 

insurance products. They needed to keep the CBO score down and 

that meant lumping everyone into Medicaid right at the last 

minute. 

Mr. Chairman, I thank you for your indulgence. I will yield back. 

6 

Mr. UPTON. I would recognize the ranking member of the full 

committee, the distinguished gentleman from California, Mr. Waxman, for 5 minutes for an opening statement. 

Mr. WAXMAN. Thank you, Mr. Chairman. 

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Mr. WAXMAN. Today we will hear the views of several of the Nation’s governors on the impact of the Affordable Care Act and on 

the Nation’s critical safety net health program, Medicaid. Medicaid 

and the ACA are both partnerships between the federal and the 

State governments. We share the responsibility for making these 

programs run efficiently and serve the needs of the populations 

that depend on them. So this can and should be a productive dialog. But in my view, that does not include re-litigating the Affordable Care Act. 

ACA is already delivering important benefits: prohibiting insurance companies from rescinding insurance when someone gets sick, 

requiring coverage of preventive care for no cost, allowing young 

adults to stay on their parents’ insurance up to the age of 26. 

Three new reports we are releasing today highlight the benefits 

of the new law in the States represented by the three governors 

who will be testifying. They show, for example, that in Utah, 1.8 

million residents are already receiving consumer protections 

against the worst abuses of the insurance companies. In Mississippi, over 30,000 seniors have already saved hundreds of dollars 

on high Medicaid drug costs, and I would like to ask, Mr. Chairman, that these reports, which show precisely how much the Affordable Care Act will help millions of Americans, be included in 

the record. 

Mr. UPTON. Without objection. 

[The information follows:] 

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Mr. WAXMAN. The Affordable Care Act gives States a major role 

in its implementation. It allows great flexibility for States to run 

new health insurance exchanges and to continue to run their Medicaid programs, the subject of today’s hearing. 

At this time I would like to submit for the record a February 3rd 

letter from Secretary Sebelius describing the flexibility that exists 

in the Medicaid program, and without objection, Mr. Chairman—— 

Mr. UPTON. Again without objection. 

[The information follows:] 

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Mr. WAXMAN. It is no secret that States are having problems 

with their budgets and that the recession is a significant contributor. When unemployment increases, State revenues decline and 

more people rely on Medicaid and CHIP, and Medicaid has been 

working exactly as intended. Medicaid has enrolled an additional 

6 million people during the recession, many who lost other forms 

of insurance when they lost their jobs. Medicaid is the final safety 

net for these families, but the program is still extremely efficient. 

As a matter of fact, Medicaid spending growth on a per-enrollee 

basis has been slower than increases in private health premiums. 

What would be helpful here is to make Medicaid a program that 

automatically corrects for recessions and disasters with additional 

federal support so States are not stretched beyond their means at 

a time of economic stress when Medicaid enrollment grows to help 

people losing their jobs or in a crisis. 

I want to highlight other important facts about the program. 

Medicaid covers 45 million low-income children and adults. It assists almost 9 million seniors and people with disabilities with 

Medicare costs. It covers 70 percent of nursing home residents and 

44 percent of people with HIV/AIDS. It is the Nation’s safety net 

program that helps those most severely in need. The program’s 

benefit package responds to the needs of the population it serves, 

providing prenatal and delivery care, speech and occupational therapy, case management and community-based care that helps individuals with disabilities stay out of a nursing home. Medicaid offers States considerable flexibility in the management and the design of the program. 

To be clear, there are aspects of the program we can improve. We 

can reduce costs for 9 million dually eligible beneficiaries, low-income seniors and disabled that are eligible for both Medicare and 

Medicaid. This group accounts for just 15 percent of total enrollment but 39 percent of total Medicaid costs. 

Here is where the ACA helps the States. It establishes the Federal Coordinated Health Care Office to reduce the cost and increase 

the quality of care for the individuals. It established a Center for 

Medicare and Medicaid Innovation with a charge to identify and 

develop policies to improve care and cut costs. 

These are the changes we need to concentrate on, not radical 

changes that will add to the number of uninsured. A number of 

governors have suggested a Medicaid block grant with no standards for coverage or care. This idea was discredited 30 years ago, 

and it will be discredited again. It will leave States with inadequate funding and remove the federal commitment to be a full 

partner. It will result in loss of coverage for the most vulnerable 

and severely disabled adults and children, people needing nursing 

home care, and poor children and families, and it will exacerbate 

unfair distributions of dollars among the States. Calls to block 

grant, cap or cut this program under the guise of flexibility and fiscal restraint are shortsighted. 

I hope today we can concentrate on how we can work together 

to make our programs run better, not destroy them. 

Thank you, Mr. Chairman. 

[The prepared statement of Mr. Waxman follows:] 

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Mr. UPTON. Thank you. 

I would now recognize the chairman of the Health Subcommittee 

for 5 minutes, Mr. Pitts. 

Mr. PITTS. Thank you, Mr. Chairman. 

OPENING STATEMENT OF HON. JOSEPH R. PITTS, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH 

OF PENNSYLVANIA 

Mr. PITTS. Right now, States across the Nation are struggling to 

balance their budgets and reduce costs without sacrificing the quality of care for their current Medicaid enrollees. Many States have 

already made deep cuts trying to achieve balanced budgets. But 

under the maintenance of effort provisions in Obamacare, if a State 

takes any action that makes eligibility for Medicaid more restrictive than the standards in effect for the State’s program as of 

March 23, 2010, that State could lose all federal funding. If States 

can’t change their eligibility criteria, governors are left with little 

flexibility and few choices but to cut payments to providers or cut 

other parts of the State budget, for instance education and transportation, in order to maintain federal Medicaid spending. 

What does this look like for my home State of Pennsylvania? In 

an op-ed on USAToday.com, Pennsylvania Governor Tom Corbett 

today wrote, ‘‘Pennsylvania’s Medicaid program, for example, has 

seen steady, unsustainable increases in the number of people it 

serves and the cost of those services. The Keystone State’s Medicaid budget is growing at nearly 12 percent a year, while the Commonwealth’s general revenues have grown by just 3 percent a year. 

It is a trend that simply cannot continue, but one that will be unavoidable as long as inflexible federal rules guide State policies.’’ 

A May 2010 Kaiser Family Foundation report found that by 

2019, Pennsylvania’s Medicaid rolls may grow by an additional 

682,880 people and may cost the State an additional $2.041 billion 

over the 2014-2019 time period. 

Many of our governors, including Governor Herbert of Utah and 

Governor Barbour of Mississippi, who are with us today, have already spoken out and asked the Secretary of Health and Human 

Services to relieve them of some of the restrictive healthcare-related federal mandates, including the maintenance of effort provisions. The responses they have received have not been encouraging. 

So I look forward to hearing from our witnesses today and learning firsthand what the impact of Obamacare will be on State Medicaid programs and other State health programs. I am also interested in hearing their ideas to provide access to quality care for 

greater numbers of people, while keeping costs under control. 

[The prepared statement of Mr. Pitts follows:] 

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Mr. PITTS. At this time I would like to yield 1 minute to Dr. 

Gingrey of Georgia. 

Mr. GINGREY. Thank you for yielding. 

New CBO numbers on Obamacare out in the news are definitely 

not good. Costs have increased by $460 billion in just 2 years and 

State Medicaid costs rose by 300 percent from $20 billion to $60 

billion. Can States reform their programs or do a better job of 

screening out individuals who don’t belong in the program in order 

to deal with these crushing costs? No, they can’t. Obamacare expressly forbids them from making eligibility changes that might remove people who are illegally in the program until at least 2014. 

Well, can States afford to wait until 2014? Rhode Island sure can’t. 

The city of Providence just sent termination letters to every single 

teacher it has, 2,000 in all, in order to give themselves as much 

budgetary flexibility as possible. In fact, 34 States and the District 

of Columbia have already cut K-12 education programs and 40 

States have cut higher education over the last year due to budgetary problems. 

So today this country is forced to stare at an inconvenient question: How can our children compete in the global economy without 

a quality education? President Obama has often said that we need 

to stick with this health reform proposal because it lets children up 

to age 26 stay on their parents’ insurance policy. Well, Mr. President, when your economic policies make our college graduate children less likely to find a good job, they are going to need to stay 

on their parents’ health policy, and I yield back. 

Mr. PITTS. I yield at this time 1 minute to Ms. Blackburn of Tennessee. 

Ms. BLACKBURN. Thank you, Mr. Chairman. Welcome to our witnesses. 

Our chairman mentioned that the States were expecting the cost 

to be twice what the Federal Government had estimated. I would 

like to make everyone aware, we have had a test case for 

Obamacare. It was in the State of Tennessee. It was called 

TennCare. Costs were not twice what were estimated, they were 

four times what were estimated. 

Mr. Chairman, our former Governor, Phil Bredesen, had a great 

article in the Wall Street Journal on this. I would like to submit 

it for the record, as well as ‘‘A history ignored’’ by Edward Lee 

Pitts from World magazine. This lays out what happens. TennCare 

ate up 35.3 percent of the State budget before it was addressed. 

There was no more money for higher ed, no more money for education. If you want a program that is going to eat up every dollar 

and is too expensive to afford, this is it. 

I am looking forward to talking with our governors. Governor 

Patrick, looking forward to what you have to say about a failed program in your State, Massachusetts Care. Yield back. 

Mr. UPTON. The chair will recognize for an opening statement 

the gentleman from New Jersey, Mr. Pallone, for five minutes. 

Mr. PALLONE. Thank you, Mr. Chairman. 

38 

OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY 

Mr. PALLONE. Today we meet again as our Republican colleagues 

continue their assault on the Affordable Care Act and the many 

positive benefits it offers Americans nationwide. The specific focus 

on Medicaid in this hearing has little to do with our newly enacted 

health reform legislation. It is simply an extension of Republicans’ 

decades-long interest in undermining and ultimately dismantling 

the Medicaid program. 

I point out that under Democratic leadership, the previous Congress understood the dire straits States were facing and granted 

significant federal relief through the Recovery Act to ensure that 

our safety-net programs could operate as they were designed to: to 

provide Medicaid coverage for vulnerable Americans when they 

need it most. 

And this certainly should be contrasted with the recently passed 

Republican Continuing Resolution which achieves nearly one-third 

of its budgetary spending cuts by reducing critical aid for State and 

local governments. It is no surprise to anyone that the Medicaid 

rolls are expanding right now when the economy is contracting. 

Medicaid often expands and vice versa. In challenging economic 

times, if unemployment increases and incomes drop, fewer people 

receive health insurance from their places of employment and more 

individuals meet the eligibility requirements for Medicaid coverage. 

Now, we have been hearing a lot about the need for flexibility in 

the Medicaid program. States already have broad latitude to design 

their Medicaid programs after meeting minimum health care coverage benchmarks. They may also apply for section 1115 Medicaid 

waivers to amend the program even further. But the flexibility my 

Republican colleagues seek seems more directed at destroying the 

Medicaid program than strengthening it. Block granting Medicaid 

is no panacea for States. It would threaten the fundamental tenet 

of the Medicaid program that it can expand and contract according 

to need. By changing the federal component of Medicaid from a 

fixed percentage to a fixed dollar amount, States could be left holding the bag with much higher bills in times of economic crisis. It 

could be truly catastrophic both for States and for the citizens who 

desperately require medical assistance. 

And we should also be wary of proposals to raise cost sharing 

and copayments on low-income and working families in Medicaid. 

Numerous studies, including one conducted by Rand Health, found 

that even nominal copayments lead to a much larger reduction in 

the use of medical care by low-income adults and children and seriously compromise access to needed health care. 

There are a lot more thoughtful ways to harness the costs of 

Medicaid than what our colleagues on the other side are proposing. 

The Affordable Care Act advances a commonsense philosophy regarding shared responsibility among individuals, employers, the 

federal and State government. The Medicare maintenance of effort 

to protect access to health care for the most vulnerable is the 

State’s responsibility in the near term until full health reform is 

reached in 2014. After that, 100 percent of the costs of the MedVerDate Nov 24 2008 13:20 Aug 19, 2011 Jkt 037690 PO 00000 Frm 00042 Fmt 6633 Sfmt 6633 F:\112-011 OBAMACARE-PDF MADE\112-11 OBAMACARE-PDF MADE WAYNE
39 

icaid expansion included in health reform will be borne by the Federal Government and then phased down to 90 percent in 2020. 

Furthermore, the Affordable Care Act enacted meaningful Medicaid reforms which slow the growth of health care costs for both 

States and the Federal Government. It promotes Medicaid demonstration projects that institute delivery system reform and finance State efforts to establish medical homes in Medicaid, which 

will improve care for those with substantial health needs. We also 

give the Federal Government and the States important new tools 

to fight fraud in Medicare, Medicaid, SCHIP and the State health 

insurance exchanges. 

We need to think carefully about the profound devastation some 

of the Republican proposals on Medicaid would have on working 

families and the State health agencies that serve them. I have been 

here for a long time, and it is almost every year we see another 

proposal by the Republicans to dismantle Medicaid. They don’t like 

Medicaid. I know that. But the bottom line is that Medicaid has 

been a much-needed lifeline for the 6 million people that enrolled 

in the program during this recession, many of whom did lose employer-sponsored health insurance. 

I have a minute left, Mr. Chairman. I would like to yield that 

to the gentlewoman from Wisconsin, Ms. Baldwin. 

Ms. BALDWIN. Thank you, Mr. Chairman. 

Right now across the country and particularly in my home State 

of Wisconsin, we are seeing the effect of unfortunate attacks by 

some of our Nation’s governors on the values we hold dear. I am 

sorry that Wisconsin’s Governor, Scott Walker, declined the Majority’s invitation to be on this panel today. Governor Walker’s budget 

adjustment bill would not only strip away workers’ rights, it would 

also gut Wisconsin’s Medicaid program. It violates Wisconsin’s 

proud tradition of providing comprehensive health coverage for our 

most vulnerable citizens by potentially eliminating insurance coverage for 63,000 parents and 6,800 adults and reducing coverage 

for current and future enrollees. 

But Governor Walker’s dangerous budget plan is also fiscally irresponsible. While Walker has offered his proposal under the guise 

of repairing the State budget and saving money, the proposed Medicaid provision would not yield any savings this year. Instead, the 

plan would put the State at risk for losing billions of dollars in 

Medicaid funding at a time when it can least afford to lose this 

funding. 

I stand in solidarity with my fellow Wisconsinites who have 

taken to the streets to oppose State plans that threaten the health, 

education and safety of the people of our great State. 

I yield back. 

Mr. UPTON. The gentlelady’s time has expired. 

At this point a quick thing. It is my understanding that the 

Democratic Steering and Policy Committee has approved Donna 

Christensen to be back with us, and even though the full caucus 

has not approved it yet, we welcome her back and we will view her 

as a member of the committee for all intents and purposes this 

morning, without objection. 

40 

I now recognize the following gentlemen for 1 minute each to introduce their governors: Mr. Matheson, Mr. Markey and Mr. Harper. Mr. Matheson. 

Mr. MATHESON. Thank you, Mr. Chairman, for holding this hearing today. 

I want to extend a thank you to my governor, Governor Herbert, 

for providing Utah’s experiences with reforming our health care 

system. As many on this committee probably know, Utah is one of 

the few States that took the initiative before enactment of health 

care reform at the federal level to tackle reforms to our health care 

system at the State level. One in particular was the establishment 

of a health insurance exchange in Utah. Our State’s experience can 

certainly testify to the flexibility States need in order to implement 

this law. 

I appreciate Governor Herbert’s participation at today’s hearing. 

I want to extend him a warm welcome to our committee and look 

forward to his testimony and insight. 

I yield back. 

Mr. MARKEY. It is my pleasure to welcome Governor Deval Patrick from the great Bay State here to Washington. 

In 2006, Massachusetts trailblazed the path for the health care 

reform we would see here on Capitol Hill just a few years later. 

Our outstanding governor has been the driving force behind successful implementation of the Massachusetts law. 

In November of 2010, he was overwhelmingly reelected to a second term. Under his watch, an astounding 98 percent of Massachusetts residents and 99.8 percent of our children now have good, dependable health insurance. No other State comes close. 

Just recently, Governor Patrick proposed new legislation to lower 

health care cost without cutting into our residents’ quality of 

health care or access to services. His legislation focuses on quality 

of health care services over quantity, encouraging providers to better coordinate care for their patients. This means lower costs and 

healthier patients. Our experience in Massachusetts shows that far 

from being one size fits all, health care and reform efforts provide 

States with wide latitude. 

I can’t think of a better person than Governor Patrick to join us 

this morning to highlight the great work we have done in Massachusetts, and I look forward to his testimony. It is our honor to 

have you with us here this morning, Governor. 

Mr. HARPER. I am honored to introduce one of today’s witnesses, 

Governor Haley Barbour of Mississippi, who has made the tough 

decisions in Mississippi to make sure that we have a balanced 

budget, money in the bank, and has been a true leader on energy 

issues in this country. Governor Barbour has promoted a healthier 

Mississippi by supporting Let’s Go Walking, Mississippi, along with 

First Lady Marsha Barbour. The program is discussed in schools 

across the State to show kids the importance of exercise and 

healthy meals. 

Governor Barbour has worked diligently to protect the solvency 

of Mississippi’s Medicaid program by controlling cost. Under his 

leadership, Medicaid changed its prescription drug program to better utilize generic drugs instead of more expensive brand-name 

drugs. He also promoted annual physicals for Medicaid beneVerDate Nov 24 2008 13:20 Aug 19, 2011 Jkt 037690 PO 00000 Frm 00044 Fmt 6633 Sfmt 6633 F:\112-011 OBAMACARE-PDF MADE\112-11 OBAMACARE-PDF MADE WAYNE
41 

ficiaries to detect health problems early by checking them for diabetes and high blood pressure and making sure they are taking the 

right medications. 

But to truly understand Governor Haley Barbour, look no further 

than what happened in the aftermath of Hurricane Katrina to see 

what his leadership was about, what he and First Lady Marsha 

Barbour did. They didn’t wait around, Governor Barbour didn’t 

wait for somebody to come help him. He didn’t wait for others. He 

didn’t sit around and complain. He simply rolled his sleeves up and 

went to work, and the rest of America got to see what it takes to 

be a great leader. 

Governor Barbour, we are honored to have you today. 

Mr. UPTON. Thank you. 

Governors, welcome. Take your seat at the table. We appreciate 

you submitting your testimony in advance. At this point we will 

recognize each of you for 5 minutes each, and we will begin with 

Governor Herbert from Utah. Welcome. 

STATEMENTS OF GARY R. HERBERT, GOVERNOR, STATE OF 

UTAH; DEVAL PATRICK, GOVERNOR, COMMONWEALTH OF 

MASSACHUSETTS; AND HALEY BARBOUR, GOVERNOR, STATE 

OF MISSISSIPPI 

STATEMENT OF GARY R. HERBERT 

Mr. HERBERT. Well, thank you, very much. Good morning. I am 

Gary Herbert, Governor of the State of Utah. I would like to thank 

Congressman Upton and other members of the committee for your 

invitation to testify here today. 

Let me begin by stating that I am a firm believer in the principles of Federalism embodied in the 10th Amendment. A balance 

of powers between the States and the Federal Government is not 

only right and proper, but essential to finding solutions to the complex problems we face today. 

Justice Louis Brandeis famously described States as laboratories 

which can engage in ‘‘novel social and economic experiments without risk to the rest of the country.’’ 

In Utah, we began our health system reform efforts 5 years ago, 

long before the Patient Protection and Affordable Care Act arrived 

on the scene. The lessons we have learned in our experiments in 

health system reform can serve as a guide to other States as they 

begin their own reform efforts. 

The Federal Government has taken the opposite approach with 

a one-size-fits-all decree. The governors, the very people responsible for shoehorning the details of this decree in our agencies and 

budgets, were never invited to the table to give our input or asked 

for our opinions when the act was proposed by the Obama Administration or debated in Congress. I find that frankly unconscionable. 

The States can and should find their own solutions tailored to 

their own unique circumstances. In Utah, for example, a majority 

of Utah’s uninsured population are employed. Most work for small 

businesses that do not offer health insurance benefits. Utah also 

has the youngest population in the country. Many of our uninsured 

are the so-called ‘‘young immortals’’ who have deemed traditional 

42 

health insurance coverage to be either unnecessary or too expensive. 

In order for health systems reform to be effective in Utah, we 

had to respond to the needs of our small businesses and their employees. As part of our health system reform efforts, Utah small 

businesses have the option of using a defined contribution model. 

This model allows employers to manage and contain their health 

benefit expenditures. 

With the creation of the Utah Health Exchange, Utah employees 

also benefit from expanded access, choice and control over their 

health care options. Employees can now purchase one of more than 

100 plans currently offered through the exchange. 

Our figures also show that 20 percent of businesses participating 

in the Utah Health Exchange are offering health benefits for the 

first time. 

Just as Henry Ford offered his first customers a choice of any 

color car they wanted as long as they chose black, the Affordable 

Care Act allows States flexibility in implementing the act as long 

as they do it the way Washington tells them. 

Another challenge for Utah is our increasing financial obligation 

for Medicaid. Even before the Affordable Care Act, Medicaid was 

already a large and growing part of the Utah State budget. In the 

1990s, Medicaid took 9 percent of our general fund. In fiscal year 

2010, it was 18 percent. By fiscal year 2020, it is estimated to exceed 30 percent of my general fund budget, and that is without the 

federally mandated expansion of the Affordable Care Act. 

I have come to Washington to present solutions to help ease the 

burden on our State. First, I call upon the Administration to support an expedited appeals process to the Supreme Court for the 

health care litigation. States cannot be left with uncertainty in regards to the implementation of this act. 

Second, I ask Congress to gives States flexibility to find health 

care solutions based on each State’s unique needs, and third, we 

have also proposed specific solutions for reform. These reforms will 

require that the Center for Medicare and Medicaid Services support our waiver requests. 

In the interest of time, I have included details of our recommendations in my submitted testimony but I will highlight just 

one example here today. In our efforts to be more innovative and 

efficient, we developed an approach which uses paperless technology to communicate with our Medicaid clients, reducing costs by 

the State of Utah as much as $6.3 million a year. With this flexibility in this one area alone, we estimate that all the States adopting this technology could save between $600 million and $1 billion 

per year. 

Communicating by e-mail seems like a no-brainer. However, we 

waited for 8 months to hear from the Federal Government. When 

we did hear something, it was a denial, and in a bitter irony, the 

denial came by e-mail. Interestingly, when I raised the issue with 

President Obama just yesterday, I later received this note from 

Secretary Sebelius letting me know that we could now in fact proceed with a paperless process. While I appreciate this positive response, and I do, I have to ask myself two questions: first, why did 

it take a personal conversation between a governor and a President 

43 

of the United States to resolve this simple issue, and second, and 

even more important, why do we even have to ask for permission 

to make this logical cost-saving improvement? 

For me, the situation illustrates what is wrong with the current 

partnership between the States and the Federal Government: a 

partnership that is one-sided and puts the States in a subservient 

role. 

In conclusion, I emphasize again that real health care reform I 

believe will rise from the States, the laboratories of democracy, not 

from the one-size-fits-all approach imposed by the Federal Government. From the days of our pioneer forefathers, Utahans have been 

finding Utah solutions to Utah problems. I am here today to assert 

our right and our responsibility to continue to do so. Thank you. 

[The prepared statement of Mr. Herbert follows:] 

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Mr. UPTON. Thank you. 

Governor Patrick. 

STATEMENT OF DEVAL PATRICK 

Mr. PATRICK. Thank you very much. Mr. Chairman, Mr. Waxman, to all the members of the committee, thank you for the opportunity to be here today. Thank you, Congressman Markey, for the 

warm welcome and generous introduction. I am looking forward to 

discussing with you the impact on the States of the Patient Protection and Affordable Health Care Act and the next steps in implementing national health care reform. And thank you in advance, 

Mr. Chairman, for your understanding about my having to leave by 

11:30 to catch a plane to get back home. 

In the interest of time and with your permission, I will simply 

submit for the record the written testimony that we have provided 

and offer a shorter statement now. 

As many of you know, the Affordable Care Act enacted last year 

is modeled in many respects on our reform measure in Massachusetts enacted in 2006. Our experience with our own reform in Massachusetts may forecast what other States may expect from national health care reform in a couple of respects. 

Today, thanks to effective implementation of our 2006 reform legislation, more than 98 percent of Massachusetts residents have 

health care coverage today including 99.8 percent of our children. 

As the Congressman said, we lead the Nation in both categories. 

More people are getting preventive care instead of waiting until 

they have to go to the emergency room. Workers and their families 

no longer have to worry about a catastrophic illness forcing them 

into bankruptcy or being denied coverage because they are already 

sick. We have not had the problem of crowd out where companies 

have abandoned insurance plans for their employees in favor of 

publicly subsidized plans. In fact, the percent of private companies 

offering health insurance to their employees has increased from 70 

percent before the bill was passed to 76 percent today. 

We paid for expanded coverage just as we said we would: by delivering more care in primary care settings than in emergency 

rooms. In 2005, Massachusetts paid over $700 million for health 

care for the uninsured and underinsured. In 2010, we spent $405 

million, nearly $300 million less. With 98 percent of our residents 

covered, universal coverage has increased State spending by about 

1 percent of our total State budget. Overall, Medicaid represents 32 

percent of annual State spending today and has grown about 2.7 

percent per capita since our reforms were enacted. 

Ours is a hybrid solution. Like the Affordable Care Act, it emphasizes private insurance purchased in the open market at competitive prices and service delivered by private clinicians. People 

choose their own doctors. 

We still have challenges, of course. For example, even with the 

highest per capita ratio of primary care physicians to residents in 

the country, there are not enough primary care physicians. The 

wide variance in the reimbursement rates at provider hospitals is 

another challenge. But these are challenges all over the country. 

The point is, that in Massachusetts we stopped limiting our thinking to the same old two choices between a perfect solution or no 

65 

solution at all. We chose to try something and we moved, and it 

has worked. 

The process of developing our reform measure is something I am 

proud of too and I just want to touch on very briefly. Then-Governor Mitt Romney, a Republican, working together with a Democratic State legislature, a Democratic United States Senator, Ted 

Kennedy, and a broad coalition of business and health care leaders, 

labor, patient advocates, came together to invent our reform bill 

and then stuck together to adjust it as we have gone along and to 

refine it. That bill was an expression of shared values of our belief 

that health care is a public good and that everyone in Massachusetts deserves access to it. 

So for Massachusetts, the Affordable Care Act is familiar. Like 

our law, it improves health security for all our citizens. It takes a 

hybrid approach that leverages the best of government, nonprofits 

and private industry, and with President Obama’s leadership, it 

was developed and supported by a broad coalition of stakeholders 

and advocates who understood that our public health and economic 

competitiveness demanded action. 

The Affordable Care Act is also cost-effective. According to the 

Congressional Budget Office, the act will reduce the federal deficit 

by $124 billion through 2019 and by more than $1 trillion in the 

subsequent decade. So national health reform is an important piece 

of a responsible plan to improve our fiscal outlook for the long 

term. 

Based on our experience at home, national health reform is also 

good for our economic competitiveness. Matt McGinity, the CEO of 

a small technology company in Natick, a town outside of Boston, 

bought health insurance through a program created by the Commonwealth Connector, which is our version of a health exchange. 

The program, called Business Express, is an online service to help 

small businesses easily shop for private health care and find the 

best possible value. Using Business Express, Matt was able to compare health plans side by side and avoid a 23 percent premium increase his current insurer was proposing. He and his employees 

saved $9,300. Now, that may not seem like much to many of you 

here but it is meaningful to Matt’s company and to thousands of 

small businesses like it in our home State of Massachusetts. 

I met a young entrepreneur recently who moved his business up 

to Massachusetts from Florida—I hope I am not upsetting anyone 

here from Florida in saying this—because with a young family he 

wanted to be able to start his venture without worrying that his 

children would not have health insurance. In other words, universal coverage has helped our competitiveness. 

So I see my time is up. Let me just wrap up, and I hope we can 

get to what I feel is the nub of the issue, which is cost control, and 

cost control is a challenge all over the country in places that have 

a universal system and in those that don’t, 130 percent premium 

increases over the last decade. We have some strategies that we 

have put in place and that we are pursuing in Massachusetts to 

get at that nationwide issue, and frankly, there are some elements 

of the Affordable Care Act that help us in that regard as well, and 

I look forward to your questions. Thank you very much, Mr. Chairman. 

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[The prepared statement of Mr. Patrick follows:] 

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Mr. UPTON. Thank you. 

Governor Barbour, welcome. 

STATEMENT OF HALEY BARBOUR 

Mr. BARBOUR. Mr. Chairman and members of the committee, 

first of all, thank you for asking. The first thing we want to say 

is thank you. When they were doing the Affordable Care Act, there 

was a big meeting at the White House of Members of Congress 

from both parties, and there were no governors, and so thank you 

to the committee, both Republicans and Democrats, for asking governors what we think. 

I would like to associate myself with Governor Herbert’s request 

that the cases from Florida and Virginia on the constitutionality of 

the federal act be expedited. It is in our interest to know the answer sooner rather than later, and the thing we fear the most is 

conflicting opinions from different circuits. We have already seen 

conflicting opinions at the district court level. Conflicting opinions 

from different circuits would just compound that problem. So for 

those of you who have any influence on that, we would like to get 

that question answered sooner rather than later. 

I am delighted to be here with my friend Deval Patrick. Massachusetts has a State health insurance program that they are obviously happy with, and we think that is their right, and when Senator Kennedy and Governor Romney and then Governor Patrick, if 

that is what Massachusetts wants, we are happy for them. We 

don’t want that. That is not good for us. We don’t want that. We 

don’t want community rating. We don’t want extremely high mandatory standard benefits packages. So the point I am trying to 

make is, different States have different problems, we have different 

ideas, and while you may not believe it, some politicians obviously 

who act like you all love our constituents more than we do, believe 

it or not, we love our constituents as much as you all do and we 

want to do right for them but we want to do what we can afford 

and can sustain. 

Medicaid is the second biggest item in my budget after education. 

We spend about 63 percent of the State budget on education, and 

Medicaid is the next biggest thing. However, Medicaid’s growth before I was Governor, it was growing at 16-1/2 percent a year and 

we were cutting our community colleges and cutting our universities because the money was having to be diverted to Medicaid. 

In my 7 years as Governor, we have reduced Medicaid expenditure growth to 4 percent. We have not changed eligibility with one 

exception. The people who we used to give pharmaceuticals 

through the Medicaid program who are dual eligibles now get their 

pharmaceuticals through Part D. So in full disclosure, I want to 

say that. The reason I do is because of this, because we have got 

the flexibility to do it, we reduced our pharmaceutical program’s 

cost from $697 million annually to $279 million, a 60 percent reduction. A little bit of that came from Part D but primarily by 

going to generics. We are 78 percent generic now and the meds are 

great for people. If somebody has to have a brand name, we do 

that. 

Flexibility to do that kind of stuff is critical for us. That is what 

we need. One of the things we were allowed to do my first year is, 

80 

our Medicaid roll had gone from 510,000 to 750,000 in 4 years. Forgive me for thinking maybe that wasn’t the way it should have 

been. So we found out that the previous administration had not followed the federal rule that you have to require people to reestablish their eligibility annually. They weren’t doing that. We require 

our beneficiaries to reestablish their eligibility annually in person, 

and a lot of people who probably had once been eligible for Medicaid but weren’t anymore didn’t come to try to requalify. We make 

exceptions for people in nursing homes, for disabled children, for 

people who are homebound because they are sick, but this is a benefit on average that is worth somewhere between $6,000 and 

$7,000 and we don’t think it is a burden once a year to go to one 

of about 70 places just to reestablish your eligibility for this program. We do that for everybody. 

What we would like is the ability while they are there to mandate that they take a physical. We offer at this meeting every Mississippi Medicaid beneficiary a health assessment, and hardly any 

of them take us up on it. We would like to be allowed, and we don’t 

think we ought to have to ask for permission to make that mandatory. But there are a lot of things you have to get permission to 

do. Waivers are a problem you will hear from many people but I 

want to tell you, State plan amendments can be just as big a problem. We have a State plan amendment where they met the 180- 

day requirement to approve our State plan amendment but then it 

took them a year to approve the contract that was going to be part 

of the State plan amendment. That doesn’t help. 

Let me just make one other point about this, and I know my time 

is up but I think it is important. We have $7 million in Medicaid 

that comes from fines paid by nursing homes that had some violation. We have to get CMS’s permission to spend that. We asked for 

permission to spend it to build a facility for the 20 to 25 very sick 

children, typically vent patients, that right now we have to put in 

the hospital, very expensive care, or send them out of State because the regular nursing home is really not set up to have 79 senior citizens and one 5-year-old. We were told well, you can do that 

if you remodel an existing building but you can’t do it if you build 

a new building on our University Medical Center State hospital 

campus. Those kinds of things, we should not be required to ask 

permission to do those kinds of things, whether it is to save money 

or provide better care. 

My time is up and I would be glad to take any questions. 

[The prepared statement of Mr. Barbour follows:] 

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Mr. UPTON. Thank you all. We will ask questions alternating between sides until you all have to get on your planes to go back 

again. We appreciate you being here. 

Governor Herbert, you mentioned that in Utah you have nearly 

100 different exchanges that folks are able to participate in. Has 

your State examined how any of those would still be around when 

the Affordable Care Act would be fully implemented? 

Mr. HERBERT. Well, it is uncertain. The hope is that we would 

be able to maintain our exchange even during the implementation 

of the Affordable Care Act as part of the discussion right now for 

States to do their own exchange or the Federal Government will 

come in and do one for you. I think that because we got an early 

run on this that we are probably going to be able to maintain. We 

have 100 plans and a number of different providers, and it is growing, and small businesses for the first time are finding a way to 

provide a benefit package of health care. 

So our exchange is working the way we thought it would work. It has only cost us about $500,000 to $600,000 to set it up, and so 

we only have about three people on staff that are running it. So 

it is a very different approach than Governor Patrick’s, and I am 

not saying it is the approach, it is an approach, and I would just 

echo what Governor Barbour said. You know, all States ought to 

have opportunities to find the solutions to the problem and so ultimate flexibility is probably what we need, and I think we will find 

solutions to the health care issue that represent the demands and 

needs of our own respective States. 

Mr. UPTON. Now, as I understand it, many of your plans are 

health savings accounts, HSAs. Does your State anticipate seeking 

a waiver to try and keep those alive then? 

Mr. HERBERT. We don’t have health savings accounts that have 

been put into place or at least in any dramatic form right now with 

our health exchange. What we have provided really is a defined 

contribution as opposed to a defined benefit where the small business people now can identify how much money will you put towards health care. Then the consumer takes that money, goes to 

a portal of information and then shops for whatever is best for 

them in their own individual interest, and it introduces private 

competition as people search for their business and try to compete, 

and it puts the consumer in control of that money, and so it is similar to health savings accounts. It allows the consumer to spend the 

money as they see fit as opposed to how the insurance company 

sees fit or the business sees fit. There is not a third-party purchaser now and it is not a one size fits all for the individual. 

Mr. UPTON. Last question. Governor Herbert, Governor Barbour, 

as you look at expanding the Medicaid population up to 138 percent, how is your State going to be able to pay for your State’s 

share of that expansion? 

Mr. HERBERT. Well, again, the eligibility requirement going up is 

going to cost my State an additional $1.2 to $1.3 billion over the 

next 10 years, and for a State the size of Utah, that is real serious 

money, and the only way we can afford to do that is, we are going 

to have to cut from some other program, whether it be education 

or health and human services and other areas of transportation 

needs that we have in a fast-growing State or raise taxes, which 

95 

will probably have a dampening effect on our fragile recovering 

economy. So the options are not good for us with that request. 

Mr. UPTON. And Governor Barbour, how would you respond to 

that? 

Mr. BARBOUR. It is going to take a very big tax increase. The federal act would require us to increase the rolls by about two-thirds 

from about 600,000 people, 20 percent of our population, to a million, a third of our population, and because the costs are back-loaded, you know, the first few years there is very little cost, a billion 

three to a billion seven over 10 years, but by year 10, it will be 

$443 million is the estimate. Four hundred and forty-three million 

dollars is a gigantic increase in our taxes but that is what it would 

cost us. 

Mr. UPTON. Yield the balance of my time to Mr. Guthrie. 

Mr. GUTHRIE. Thank you, Mr. Chairman. Thank you for yielding. 

That is the question I was going to go for. 

Just 3 years ago, I was a State legislator trying to make the 

budget balance, and if you looked at Kentucky’s pie, Medicaid kept 

getting a bigger piece of it, and we had to take it out of higher education. Tuition rates are higher, other things are higher in Kentucky because of the growth of Medicaid, and now Governor 

Beshear has said essentially what you said. He said, ‘‘I have no 

idea how we are going to pay for it.’’ That is a quote. And what 

is this going to do to education or other issues? I know Governor 

Herbert touched on it a little bit but Governor Barbour, alphabetically we can go—I just have a few seconds but what this is going 

to do to your State budgets if we don’t give you—— 

Mr. BARBOUR. Because we can’t run a deficit, we either have to 

raise taxes or cut spending for other things or more likely do both. 

Mr. GUTHRIE. Governor Herbert? 

Mr. HERBERT. Our increase, as I think I had mentioned earlier, 

is that for us it will be a 50 percent increase in Medicaid eligibility. 

So it is a dramatic increase in our budget, and again the $1.2 to 

$1.3 billion additional cost has got to come from someplace. Either 

you raise taxes or you cut services. It is that simple. And as a State 

legislator, you know the challenge that is. We are all having challenges with our budgets today. It is a very difficult time and this 

just adds to the problem. 

Mr. GUTHRIE. Does it affect Massachusetts differently, Governor? 

Mr. UPTON. Excuse me. My time is expired. I would yield to the 

ranking member of the full committee, Mr. Waxman, for 5 minutes. 

Mr. WAXMAN. Thank you, Mr. Chairman. Thank you, Governors, 

for your testimony. 

It seems to me in both your oral presentation and your written 

testimony there are some common themes that I think we all can 

agree on. We must continue to make Medicaid a better program. 

By innovating, we can provide better quality of care while also reducing costs, and I think we need to work together to achieve that 

goal. 

But we also know nationally that certain populations have greater health care needs than others. Children are half of Medicaid’s 

beneficiaries but they are only 25 percent of the cost. Adults including pregnant women make up 23 percent of beneficiaries but 13 

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96 

cent of the population but 44 percent of the cost, and seniors make 

up 10 percent of the beneficiaries but 23 percent of the cost, and 

this is the same for all three of your States. Children and adults 

make up the largest share of the Medicaid enrollees but they are 

only a fraction of the cost. That is why it doesn’t make sense to cut 

back eligibility for adults and children. 

First, cutting back eligibility for adults and children will save the 

State some money but not very much because these populations are 

not where the money is. Secondly, uninsured low-income kids and 

adults use the emergency rooms more than they would if they were 

insured and had a source of primary care. But the real problem is 

that the cost of that care is now going to be shifted to the emergency room, the physicians that staff it, the hospitals that operate 

it, or onto the people themselves who won’t be able to get the services. The costs, like the people, don’t just disappear once eligibility 

is terminated. They are just taken off the federal and state treasuries and shifted onto local community hospitals, physicians. That 

is really inefficient and unfair. 

So where is the money in Medicaid? Over half of the spending 

is for seniors and the disabled, and cutbacks on the disabled and 

seniors are unthinkable as these are some of the most vulnerable 

and medically needy in our society. So I have come to the conclusion we have to be smarter, we have to do things better, and under 

the Affordable Care Act, we can. For example, under the Affordable 

Care Act, we are already helping States and providers create demonstrations to structure and implement new delivery models to reduce costs and improve care for the dual eligibles, as Governor 

Barbour pointed out. That is the most expensive population of seniors and disabled. 

Governor Patrick, I heard you touch on delivery system reform 

in your opening statement. Can you talk about why you decided 

that expanding coverage and improving the quality of care are the 

right direction for us to move in as opposed to cutting back on eligibility? 

Mr. PATRICK. Thank you for the question, Congressman. First of 

all, I just wanted to say that as we have implemented and expanded coverage, our universal plan over the last 4 years, we have 

also increased spending on public education every single year to 

the highest level in the history of the Commonwealth because that 

is another values choice that we have made. 

And for us, the discussion about whether to try to insure everyone or not is a question about what kind of Commonwealth we 

want to live in, and I would suggest that the discussion about how 

to do that nationally is also about what kind of country we want 

to live in. The question of cost is a question that is with us, that 

is facing small businesses and working families whether we have 

Affordable Care Act or not, whether we have Medicaid or not, and 

that is what we have focused on. That is our next chapter in health 

care reform, and frankly, we get some tools through the Affordable 

Care Act to help us with that. 

It turns out—and I would be interested—I know I am not supposed to be asking the questions but Dr. Burgess, I wonder if 

this—— 

Mr. WAXMAN. Please don’t. 

97 

Mr. PATRICK. What is that? 

Mr. WAXMAN. Please don’t because I only have limited time. But 

your idea is to hold down costs by innovating in the delivery system—— 

Mr. PATRICK. Exactly. 

Mr. WAXMAN [continuing]. Not cutting people out of the program. 

Mr. PATRICK. Exactly. 

Mr. WAXMAN. Now, Governor Herbert—— 

Mr. PATRICK. I was just going to say that what we have learned 

from clinicians, from medical professionals is that more integrated 

care is actually better care for the patient in terms of quality but 

a lower-cost care as well, and so realigning the incentives so that 

we are paying for quality of care rather than quantity of care is 

where we are trying to move now. 

Mr. WAXMAN. Thanks. 

And Governor Barbour, I have a quick question to ask you. We 

have some areas of agreement as well, support for medical homes, 

which is also authorized by the Affordable Care Act, but I want to 

focus on the eligibility cuts right now. You promoted the idea of 

flexibility that would allow you to cut eligibility. So my question for 

you is the following. Do you intend to cut eligibility for the inexpensive adults and children, possibly flooding your emergency rooms, 

without reducing the cost substantially, or do you plan to cut off 

seniors and the disabled since that is where the bulk of the Medicaid spending is? 

Mr. BARBOUR. Thank you, Congressman Waxman, for asking. As 

I said in my testimony, I reduced the cost increase of Medicaid 

from 161⁄2 percent per annum to 4 percent. We didn’t do it by 

changing eligibility except when the Federal Government set up 

Medicare Part D, there was no reason for us to have a pharmaceutical program anymore to duplicate that. It is a very small part 

of the savings. 

You are right. Children cost us about 1,000 bucks a year. Our av- erage beneficiary costs us between $6,000 and $7,000 a year. That 

is where the savings are. The savings are in managing. We can 

give these people better care at the same time but we shouldn’t 

have to come up here and kowtow and kiss the ring to get the permission from Washington to do that to try to help our people. That 

is what we are saying. And sir, we would be willing to make this 

deal with you: Give us a block grant with total flexibility and we 

will say limit the increase in our FMAP payment to half of the national average, whatever it is, and we will take that in a heartbeat. 

Mr. WAXMAN. Thank you. 

Mr. UPTON. The chair recognizes the gentleman from Texas, Mr. 

Barton, for 5 minutes. 

Mr. BARTON. Thank you, Mr. Chairman. It is good to have you 

three governors here. This is kind of deja vu. We did this 6 or 7 

years ago. Governor Barbour was a big part of that at the time. 

We have a new governor down in Georgia, Nathan Deal, who is 

a former subcommittee chairman of the Health Subcommittee of 

this committee, and when he was subcommittee chairman and I 

was full committee chairman, we passed an amendment that gave 

the States the right to actually verify eligibility, verify citizenship. 

We didn’t say that States couldn’t cover illegal aliens but we said 

98 

if you wanted to restrict your benefits for Medicaid to U.S. citizens 

or legal residents, we gave you the right to do that. Our friends on 

the Democrat side changed that verification program to basically 

self-affirmation: if you say you are eligible, you are eligible. Governor Barbour, would one reform of Medicaid that we should consider be going back and giving States the right to actually verify 

citizenship before their extended Medicaid benefits? 

Mr. BARBOUR. Yes, sir. 

Mr. BARTON. Governor Herbert, what is your—— 

Mr. HERBERT. Absolutely. I think that would just make sense. 

Mr. BARTON. Governor Patrick? 

Mr. PATRICK. I think we do it already. 

Mr. BARTON. You think you do it already? Well, I would like to 

see your program then because if you do, you are the only State 

in the Nation that does, so I appreciate that. 

There has been quite a bit of talk in the last Congress of States 

beginning to opt out of Medicaid because it just gets too expensive. 

What would the tipping point be if we don’t change the current 

health care law? Where would States begin to seriously think about 

opting out? At what point in their budget? In Texas, for example, 

25 percent of the State’s budget is for Medicaid. In some States it 

is higher than that and in some States it is lower. Do the governors 

have a taskforce on this issue, and if so, what discussion has been 

about where States begin to seriously think about opting out? 

Again, we will start with Governor Barbour and just go right down 

the line. 

Mr. BARBOUR. I do notice that I am on Governor Patrick’s left, 

but I realize to you all I am on the right. That makes me feel better. I think it makes Deval feel better too. 

Mr. BARTON. At least you all can joke about it. That is a good 

thing. 

Mr. BARBOUR. I can’t imagine Mississippi opting out of Medicaid. 

We are a poor State. It is an important program. We just want to 

run it better. We want to run it better for the taxpayers. We want 

to run it better for our beneficiaries. We can control the cost much, 

much better, and if the Federal Government would give us more 

flexibility or just make it where we didn’t have to go ask for permission like Governor Herbert was talking about for 8 months to 

do something very commonsensical, we could, and that is in your 

budget interest too. So I am not an opt-out advocate and I am just 

being forthright about it. 

Mr. BARTON. Governor Patrick? 

Mr. PATRICK. Congressman, as I said in my opening statement, 

we are so far down this path. The Affordable Care Act is very familiar to us in its framework because we have reform measures in 

Massachusetts that are very like it, so this is not so scary to us. 

I think there is a bigger question here that goes beyond Medicaid 

and goes to the private payers as well, and that is, as I said earlier, 

the escalating costs in insurance premiums that have been with us 

all over the country, certainly all over the Commonwealth, and that 

is where we have concentrated our time. We get some additional 

tools because of the act to get at that, and I would just say respectfully, it would be wonderful to work with the Congress on that 

99 

larger issue because I think that is enormously important for our 

competitiveness economically. 

Mr. BARTON. Governor Herbert? 

Mr. HERBERT. Well, thank you, Congressman. I think it is like 

asking the question, which straw will break the camel’s back, and 

we don’t know which one will break the camel’s back. We keep piling it on and eventually we are going to have some serious back 

strain. You know, in Utah, again, we are doing pretty well with 

health care. President Obama, in fact, has used Utah as an example as he has advocated for better health care. We have good quality health care at lower cost in Utah, comparatively speaking, to 

other States. So our system really has been working pretty well. 

Mr. BARTON. So you all don’t see any State really in your experience thinking about opting out? 

Mr. BARBOUR. You said opt out of Medicaid? 

Mr. BARTON. Medicaid. That is correct. 

Mr. BARBOUR. I don’t. 

Mr. HERBERT. We have no plans to opt out of Medicaid. Our concern is really the increasing costs of Medicaid and the majority 

costs to Utah for the Medicaid expansion are coming from the 

healthy low-income adults. 

Mr. BARTON. Mr. Chairman, my time is about to expire. I am 

going to submit for the record a question for them to expand on the 

constitutionality of federal mandates that the States have to pay, 

and there are a lot of federal mandates in this Medicaid expansion 

that beginning in 2014-2016, the States have to do it and they have 

to pay for it, and I would like a response in terms of the constitutionality of that question, but I will put that in writing. 

Mr. UPTON. Great. Thank you. If you can respond quickly, that 

will be great. 

The chair would now recognize the gentleman from the great 

State of Michigan for 5 minutes for questions, Mr. Dingell. 

Mr. DINGELL. Mr. Chairman, I thank you for your courtesy. 

Gentlemen, welcome. I am delighted to see you, Governor 

Barbour. We are old friends and have been on the same side and 

opposite sides of many questions together. Governor Patrick, welcome to you, we are proud of what you are doing up there in Massachusetts. Governor Herbert, welcome to you also. 

Mr. HERBERT. Thank you. 

Mr. DINGELL. Gentlemen, very quickly. I note, Governor Patrick, 

you have had firsthand experience in implementing a State-level 

reform law and that you support the federal law and find that it 

would work well with your statutes up there. Is that right? 

Governor Barbour, I gather you, my old friend, have a different 

view. You supported overturning the law. Am I correct? 

Mr. BARBOUR. That is correct, Mr. Chairman. 

Mr. DINGELL. And Governor Herbert, I gather you have also supported overturning the Affordable Care Act. Is that right? 

Mr. HERBERT. We have joined the lawsuit in Florida. 

Mr. DINGELL. Now, gentlemen, I want to see where we are. We 

have embarked upon a great challenge and upon a great testing of 

our national will and capability here, and so let us go through some 

of these things. In the case of Mississippi, Governor Barbour, you 

are aware that health insurance can no longer discriminate against 

100 

180,000 children in Mississippi with preexisting health conditions, 

and you are also aware that as a result of the Affordable Care Act, 

about 53,000 businesses in your State, as in other States, will be 

eligible for $350 million in new health care tax credits, and Governor, you are also aware that a million and a half residents of 

your fine State are benefiting from consumer protections in the Affordable Care Act such as prohibit annual and lifetime coverage 

bans and limits banning rescissions and provides safeguards 

against unreasonable care increases. 

And you, Governor Herbert, thanks to the Affordable Care Act, find that 20,000 seniors in Utah have already received $250 rebates from high Medicare drug prices as a matter of relief, and 

again, in Utah, the Affordable Care Act now permits 270,000 Medicare recipients in Utah to receive free preventive care, and in Utah 

again, I note that the uncompensated care costs borne by Utah hospitals and health care providers will be protected against over a 

billion dollars in the next decade. And also that in Utah the Affordable Care Act, there are over 200,000 otherwise uninsured State 

residents that will be able to afford and to obtain affordable health 

coverage. 

Now, gentlemen, we have all this before us, and I am trying to 

understand. If you could assist me, starting with you, Governor 

Herbert, remember I don’t have very much time left. What are we 

going to do to replace these benefits if we repeal them? How are 

we going to make whole the categories of persons that I have just 

mentioned who will be significantly benefited? 

Mr. HERBERT. Well, I think, as Governor Barbour has mentioned, 

that we really do care about our people in our State and we will 

find solutions. 

Mr. DINGELL. That is not an issue, Governor. I don’t want to get 

into that debate. It is not a proper debate. 

Mr. HERBERT. OK. It seems like the approach from Washington 

is do it our way or it won’t get done. Again, Utah has good health 

care, has had good health care. I just, I guess, come from the position that as we look to those who need the benefits and we define 

what those benefits are, there is nobody that can define them better than the governors and the people in the States. So the eligibility, the benefits, that ought to be received, we can help define 

that better than anybody I think else, certainly better than people 

in Washington. 

Mr. DINGELL. Governor, I apologize. I have 58 seconds to share 

between your two colleagues. 

Mr. BARBOUR. Chairman Dingell, thank you. A couple points. 

Most of our small businesses won’t qualify for those subsidies. 

However, the standard benefits package that we expect to be put 

on us will cause many of our small businesses that today struggle 

to provide health insurance to their employees will drop that 

health insurance because the standards benefits package is going 

to drive the cost so high. As far as the preexisting condition, we 

recognized this issue in Mississippi long before Haley Barbour was 

governor. And for about 15 years, we have had a pool, a risk pool 

for people with preexisting conditions. It has about 3,600 people on 

it right now, and that is about average, as you can imagine. People 

move into it, and then when their preexisting exclusion expires, 

101 

they move out. The federal risk pool has 58 people, even though the 

cost is less, the premium is lower, and so this is just an example 

of something that, I don’t know, I am told 35 States have a risk 

pool like us or similar risk pool. There are things that we do, can 

do, and we are doing them and we think we should be allowed to 

make those decisions instead of having community rating, high 

mandatory benefits package, increase the cost of health insurance 

in our State. That is our concern. 

Mr. DINGELL. Governor, I just want to hear a word from Governor Patrick. 

Governor? 

Mr. PATRICK. Well, we see a tremendous amount of flexibility in 

the Affordable Care Act today. We see some further benefits in 

terms of federal tax credits for the next tier of people we are trying 

to reach. We see some tools to help us get at the dual eligibles, 

which as a number have mentioned and I know my colleagues 

agree is a particularly expensive part of the health care system, 

and we see some flexibility to try new things in terms of payment 

delivery systems and payment reform, which is where the real 

pickup is, not just in Medicaid but for the health care cost system 

generally. So for us, this is a good bill and one worth fighting for. 

Mr. DINGELL. Mr. Chairman, I thank you for your courtesy. 

Mr. UPTON. The gentleman from Illinois, Mr. Shimkus, 5 minutes. 

Mr. SHIMKUS. Thank you, Mr. Chairman. Mr. Chairman, I want 

to submit a rundown of the State of Illinois’s issue. I don’t want 

to go through it, but I want to submit that for the record. 

Thank you, Governors, for coming. I see Utah and Mississippi 

both run about a $700 million deficit right now, this is what I am 

being told, where Massachusetts has a billion-dollar deficit. You all 

have balanced-budget amendments. Illinois is $13 billion in the 

hole. Do you believe that the Obamacare gives you the flexibility 

to address changes in Medicaid to help get such a large budget deficit under control? Yes, sir, just each one. 

Mr. HERBERT. In Utah, our structural imbalance, we have no deficit. We have a structural imbalance—we used some one-time 

money, we are not borrowing it—is about $200 million. But this 

clearly, the cost to us as we move forward with the Affordable Care 

Act will throw that out the window. 

Mr. SHIMKUS. So it doesn’t give you the flexibility to meet your 

budgetary needs? 

Mr. HERBERT. Well, again, it doesn’t give us the flexibility. I 

guess the definition is how flexible is flexibility. You know, there 

are some flexibilities in it, but again, if we have to maintain maintenance of effort, if we have to in fact use the—— 

Mr. SHIMKUS. I am going to try to get through. I don’t want to 

be disrespectful but I want to get—Governor Patrick? 

Mr. PATRICK. Yes. 

Mr. SHIMKUS. You think it does give you the flexibility? 

Governor Barbour? 

Mr. BARBOUR. Well, of course, the difference is, I don’t have his 

State health care system. Under ours, it would drive up my cost. 

It would absolutely make a very large tax increase necessary. But 

102 

more importantly, it will drive up the cost for health insurance for 

the individuals and the businesses that buy health insurance. 

Mr. SHIMKUS. Thank you. And Illinois is $13 billion in debt. That 

is our financial position in the State of Illinois. If members of the 

Congressional delegation would write you a letter saying hey, Governor, we know you have issues, can you get with your health and 

services people and let us start talking about how we can jointly 

help solve this problem, would you as a governor be open to a letter 

by members of the Congressional delegation to address your concerns? Governor Herbert? 

Mr. HERBERT. Absolutely. 

Mr. SHIMKUS. Governor Patrick? 

Mr. PATRICK. I am not sure I understand the question but we 

have been working closely with our delegation. 

Mr. SHIMKUS. Well, this is Medicaid. We have a large role in the 

Medicaid delivery system. We are partners with you. If your Members of Congress said we want to help you, would you say yeah, 

come on? 

Mr. PATRICK. I never said no when our Members of Congress—— 

Mr. SHIMKUS. Thank you. 

Mr. BARBOUR. The answer is yes. I think to her credit, Christine 

Gregoire, who is the chairman of the National Governors, a Democrat, by the way, is trying to do just that, and the fact that you 

all are having governors here is encouraging. 

Mr. SHIMKUS. Just for the record, November 2009, we sent a letter to our Governor and we have yet to get a response, one that 

has $13 billion in debt based upon Medicaid. 

I want to address really quickly some cost issues. If we are going 

to try to help contain cost, EMTALA, which is the emergency room 

law that anyone who walks in the door has to receive care, even 

though it is not an emergent issue, if we address EMTALA and 

were able to triage and push people to urgent care, that would be 

a reform at the federal level, would that help you control cost? 

Mr. HERBERT. I think it would. It needs some analysis by experts 

in our State but I think so. 

Mr. SHIMKUS. Governor Patrick? 

Governor PATRICK. Yes, I think it could, and we have been taking 

those very steps. 

Mr. SHIMKUS. Thank you. Yes. Great. 

Mr. BARBOUR. I would urge you to give us permission for us to 

do something rather than telling us how to do it. 

Mr. SHIMKUS. Great. What about, Obamacare had—when we 

were talking about saving costs, it was $50 billion of savings if we 

would move on tort reform, lowering cost, $50 billion which could 

have gone to pay some of the expensive costs. Would tort reform 

be a good way to hold down costs, Governor Herbert? 

Mr. HERBERT. Absolutely. 

Mr. SHIMKUS. Governor Patrick? 

Mr. PATRICK. In the bill I referred to earlier, which is our next 

phase of health care reform, we have included tort reform in that, 

yes. 

Mr. BARBOUR. My first year as Governor, we passed the most 

comprehensive tort reform in the country. It doesn’t just help cost, 

103 

it improves the quality of care because we had doctors leaving to 

get away from lawsuit abuse and so it is more than cost. 

Mr. SHIMKUS. Last question. In federally qualified health clinics, 

we give them Tort Claims Act protection. If we are providing 

health care, Medicaid dollars, federal dollars, if we provided Federal Tort Claims Act protection for practitioners who are receiving 

federal dollars, would that help drive down cost, Governor? 

Mr. HERBERT. I think so, yes. 

Mr. PATRICK. I don’t know how to answer that. 

Mr. SHIMKUS. Well, it is a tort reform issue, so—— 

Mr. BARBOUR. Under our State tort claims act, the university 

hospital and all, they have caps under the law and it does help. 

Mr. SHIMKUS. Thank you very much. Yield back my time. 

Mr. UPTON. The chair would recognize the gentleman from New 

Jersey, Mr. Pallone, for 5 minutes. 

Mr. PALLONE. Thank you, Mr. Chairman. 

I wanted to go back to Governor Patrick because I know that in 

response to Mr. Waxman you were basically talking about how 

more quality care or improving coverage and quality care actually 

lowers costs, and I really believe that if you cover more people, you 

give them quality care, then ultimately you save the system more 

money, and at the risk of being critical of the Republicans, I am 

going to be anyway, you know, I just think it is ironic, because if 

you go back a few years, you had people like Governor Romney who 

were advocates for universal coverage because it saved money in 

the long run. I remember when the second George Bush was 

present, he was a big advocate for expanding community health 

centers. Now we see the Republicans in their Continuing Resolution cutting community health centers. Even the FMAP that gave 

more money to the States, that was a big thing with the Republicans too. Peter King introduced the legislation back in 2003, long 

before the Democrats were even doing it. But now we see the opposite. We see, you know, Republicans backtracking and saying that 

they don’t support these efforts to expand coverage and provide the 

community health centers with funding. 

I want to ask you two things, Governor Patrick. One is, if you 

just want to expand a little, because I don’t think you had a 

chance, on what Congressman Waxman asked about, you know, 

what Massachusetts did to expand coverage and how that actually 

improves quality, makes for healthier people, and in the long run 

lowers costs. Maybe you could just spend a minute or two or that. 

Mr. PATRICK. Thank you for the question, Congressman. The 

simple fact is that more people in Massachusetts today get their 

primary care in primary care settings than in higher-cost emergency room settings, and that means system costs are smoothed, 

and it is a simple principle of insurance that the more people who 

are insured, the more you spread the risk. That also moderates 

cost. But premium cost, which is, you know, the provider rates, although there is variance, they have increased faster than inflation 

in Massachusetts and everywhere else in the country. This has 

nothing to do with universal care. This has to do with the way we 

incent, if I may use that as a verb, the incentives for how we pay 

for health care. Right now we pay for the number of times you are 

in and out of an office, the number of tests that are run and not 

104 

the quality of that care, and managing that care closely, particularly for those high-cost chronically ill people, has been shown to 

be better care for the individual but also lower cost. 

So what we have in the Affordable Care Act are tools we didn’t 

have in our own health care reform and that we are building on 

with a new piece of legislation I filed 2 weeks ago to realign these 

incentives and get at systemwide costs, and that is good, not just 

for the State and for local budgets but that is good for business 

budgets and for working families. 

Mr. PALLONE. I appreciate that. And again, I didn’t hear Mr. 

Barbour criticize Mitt Romney but I know he gets a lot of criticism 

and he was the one that basically came up with this idea. He was 

a governor at the time, in any case. 

Now, I wanted to ask about community health centers because 

this is another case. When I was here and the second George Bush 

was President, he really pushed for community health centers, 

opened more of them, you know, this was going to be our answer 

for people who didn’t have coverage. Now we see in the C.R. community health centers I guess are cut by $1.3 billion relative to the 

President’s request, and that would roll back critical expansions to 

community health centers. In your State, Massachusetts, you 

would lose nearly $5 million in community health center funds 

which are being used to provide care for nearly 90,000 of your residents. I had a community health center that was funded in the Recovery Act wrote me a letter saying now that they would have to 

close the door if the C.R. becomes law. 

So, you know, how is your State going to fare if these funds are 

cut off? I mean, community health centers are a way, if we don’t 

have Medicaid or the Medicaid gets cut back, people at least can 

go there. It is another backup. 

Mr. PATRICK. No, I understand the question, Congressman. It is 

a worry for us. We have a broad and deep network of community 

health centers, and frankly, the community health centers like the 

community hospitals tend to be lower-cost settings for primary care 

than the wonderful downtown teaching hospitals that we have, and 

for our system to work and I think for a universal system to work, 

we have to have more community dispersion in where people get 

their primary care. So we very much are watching and involved in 

trying to assure that just as we keep up our end of the bargain in 

terms of our support for community health centers, that the Congress does as well. 

Mr. PALLONE. Thank you. 

Mr. UPTON. Mr. Pitts, 5 minutes. 

Mr. PITTS. Thank you, Mr. Chairman. Thank you, Governors, for 

coming. 

Mr. Barbour, you mentioned that a couple years ago you started 

a new program for persons to individually sign up for eligibility. I 

didn’t hear after that first year requiring individuals to sign up 

personally, what happened to your rolls? What percentage was the 

effect of that? 

Mr. BARBOUR. Congressman Pitts, it was a combination of 60,000 

more people working in my State, Part D, but our program, we reduced the rolls from 750,000 to 580,000. 

Mr. PITTS. That is about 20 percent? 

105 

Mr. BARBOUR. About 20 percent, that is right, and again, there 

is nobody who is not getting health care. There were a lot of people 

who weren’t eligible. 

Mr. PITTS. Now, under the maintenance of effort requirement in 

the new law, can you continue that program of having people individually sign up for eligibility? 

Mr. BARBOUR. It is my understanding that we can. 

Mr. PITTS. That you can? 

Mr. BARBOUR. Yes, sir. 

Mr. PITTS. Can you elaborate on your State’s experience in dealing with the CMS bureaucracy and your attempts to be granted 

Medicare waivers? Do you find the CMS bureaucracy helpful and 

cooperative? Do you find their decision-making process timely? Do 

you find their actions too burdensome? Would you elaborate? 

Mr. BARBOUR. My experience over 7 years as being Governor is 

there are a bunch of nice people who work there, they work hard. 

I have actually been up to their headquarters a few years ago to 

go through a really kind of complicated issue. But for whatever reason, it is slow, and I am told that the average waiver takes a year. 

I have been through personally in the last 15 months a State plan 

amendment and contract that took 15 months and at the end of 15 

months it was approved except they told us you can’t do the part 

that actually helps. You know, they didn’t approve that part of the 

contract. These are things that we shouldn’t have to come up here 

and ask for. We ought to have the flexibility to run the program. 

But I don’t think it is because they are not good people or they are 

not working hard. It is just the process is long and drawn out. 

Mr. PITTS. Thank you. 

Mr. Herbert, you mentioned an anecdote. Could you elaborate on 

your dealings with CMS bureaucracy? 

Mr. HERBERT. Well, again, I have already given the example of 

wanting to go paperless, which again I think most people here can 

see that is kind of what we are about today, and it is a voluntary 

basis so you don’t have to do it, it is not mandated but it would 

save us about $6.3 million. But after 8 months we were getting nowhere. I actually came to meet with CMS and to get things moving. 

We couldn’t understand why we were getting a denial, and the denial being sent by e-mail we thought was just ironic. That kind of 

got things moving but it was really the conversation yesterday with 

President Obama that allowed us to finally get this logjam removed 

and do something that is just sensible. 

But we have other waivers out there that we want to look at that 

would allow us to in fact put together a Medicaid rainy-day fund 

to help us slow down the costs that are rising in Medicaid, to start 

providing fee for service to payment for healthy outcomes, not just 

for procedures, to incent on the right side of the health care equation. But that will require some waivers from CMS to allow us to 

go forward. So again, we will come up with ideas, other States will 

come up with ideas but we need to have the ability to have this 

dialog and get some waiver to allow us to find efficiencies in the 

system. 

Mr. PITTS. Thank you. 

Mr. Patrick, during the debate on the Obamacare law, the proponents of the law stated passing the bill would get people to stop 

106 

using the emergency room for their care. In Massachusetts, do 

Medicaid patients visit the ER more or less than those with private 

insurance? 

Mr. PATRICK. About the same. 

Mr. PITTS. I have a study September 2011 paper by Douglas 

Holtz-Eakin suggesting that from July 2007 through March of 2008 

Medicaid patients visited the ER at a rate more than three times 

those with private insurance. Do you think that figure is in the 

ballpark? 

Mr. PATRICK. No, that figure it not current. It is about the same, 

and the total population has gone down. We started implementing 

health care reform, Congressman, in 2007, at the beginning of 

2007, so we have had a little bit more than 4 years of getting at 

that, and total utilization in the ER for primary care has gone 

down in both the private payer and public payer. 

Mr. PITTS. The half minute I have left I will yield to Dr. Cassidy. 

Mr. CASSIDY. Thank you. 

Mr. PATRICK. Congressman, I am sorry, if it is all right, do you 

mind if I also say something about our experience with CMS? 

Mr. PITTS. Go ahead. 

Mr. PATRICK. I would just like to—you know, we have negotiated 

now two waivers with CMS in order to do our own experiment, and 

I want to say that our experience has also been a very deliberate, 

sometimes feeling tedious experience with the current Administration and the Administration before. Now, when we have raised 

these issues in the past, they have expressed what I think is the 

perennial concern, which is that they know that they also have— 

just as much as we want flexibility, they know that we have to be 

accountable. But if there is a way to smooth that out, I think that 

is something that we would love to work together. 

Mr. PITTS. Thank you. 

Mr. UPTON. The gentleman’s time is expired. I would recognize 

the gentleman from Massachusetts, Mr. Markey. 

Mr. MARKEY. Thank you, Mr. Chairman. 

Mr. Patrick, Governor Barbour said that he could accept a deal 

where his State received 50 percent of the Medicaid money they receive today, and he could live with that deal. 

Mr. PATRICK. I will take his 50 percent. 

Mr. MARKEY. What would be the impact in Massachusetts if 

there was a 50 percent cut in the Medicaid funding that went to 

the State in terms of the impact on the health care of our residents? 

Mr. PATRICK. Well, I think that would jeopardize universal care. 

I mean, that would be profound for us. 

Now, we are working very hard, just to repeat myself, to get system costs down, the cost of care down, because that is important 

not just for Medicaid but across the economy, and as we gain those 

savings, that is good for the Federal Government just as it is good 

for those small businesses that are in the private market. But, no, 

we are not looking for that. 

Mr. MARKEY. No, Governor—— 

Mr. BARBOUR. Congressman Markey, if I may, what I said was, 

we would take 50 percent of the increase, not that we would cut 

our total FMAP in half, just when the increase came we would take 

107 

only half as much. So I am glad you said that because I hope others didn’t understand what I said that way. 

Mr. MARKEY. Half of the increase? 

Mr. BARBOUR. Thank you for clearing that up. 

Mr. MARKEY. I think that is important for everyone to hear. Mississippi is more than willing to accept that money. 

The next question is, Governor Barbour spoke about how he felt 

that the private sector would not insure as many of its employees 

under this kind of a system. What has the experience in Massachusetts been? 

Mr. PATRICK. That phenomenon I understand is called crowd out, 

and actually, I will tell you when I was looking at this, you know, 

I have spent most of my life in the private sector, so when I was 

looking at this when it was being debated, it seemed to me a business could make a rational decision to stop offering health care for 

their employees and say, you know, you go on the publicly subsidized. It has actually been the opposite result in Massachusetts. 

There are more businesses offering employees health insurance 

today than before our health care reform went into effect. 

Mr. MARKEY. So it has actually gone up, not down, in terms of 

the businesses providing health insurance? 

Mr. PATRICK. Correct. 

Mr. MARKEY. Now, what about your work with the insurance 

itself to contain costs? How has that proceeded since the bill has 

been implemented? 

Mr. PATRICK. Well, our work with the insurers has proceeded on 

a parallel course, not necessarily because of the Affordable Care 

Act meaning, you know, we have been seeing small businesses, and 

I suspect everybody here does, who are seeing their commercial activity pick up and then they get that increase in their premium at 

2030, 50 percent in some cases, and they can’t see a way to add 

that one or two employees, and that is important for us because 85 

percent of the businesses in our Commonwealth, as you know, Congressman, are small. So if they don’t start hiring, we don’t get a 

recovery. It is as simple as that. And so we engaged with the insurers about a year ago using existing State authority to disapprove 

excessive rate increases, and we did just that, and then we had a 

tussle and everybody eventually got to the table, and what were 20 

and 30 and 40 percent increases last year are single digit base rate 

increases this year. But that is a step. It is a temporary step. What 

we need more to the point is comprehensive payment reform and 

delivery system reform, which is what we are moving on now and 

what is accelerated frankly by provisions in the Affordable Care 

Act. 

Mr. MARKEY. Now, there are some who say that universal health 

care harms the economy, leads to higher unemployment, hurts the 

bond rating of a State. What has been the experience in Massachusetts? 

Mr. PATRICK. Well, our budgets have been responsible, balanced 

and on time for each of the last 4 years and we are working with 

the legislature to assure that again this year. Our bond rating 

started out strong, has remained strong through the recession and 

just recently was upgraded from AA to AA positive outlook. I think 

we are the only State since 2007 in the country that has had an 

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improved bond rating, and as I said, we have continued to invest 

in public education at the highest levels in the history of the Commonwealth. 

So I will also say, our unemployment rate is about a point and 

a half below the national unemployment rate but we are not satisfied. We still have to drive that down. But when I talk to those 

small businesses who are concerned about their premium increases, they appreciate that we have these additional tools now to 

be able to get at that, and as I said, I meet entrepreneurs who say 

that the security that comes from universal care in our State is a 

factor in their decisions to invest in Massachusetts, and we welcome that. 

Mr. MARKEY. So contrary to public impression, Massachusetts 

unemployment rate is down, the bond rating is up, the budget is 

balanced and we have 98 percent of the people with—— 

Mr. PATRICK. And we have got more work to do but I am very 

proud of where we are. 

Mr. MARKEY. And you have done a great job. Thank you, Governor. 

Mr. UPTON. The chair recognizes Mr. Walden for 5 minutes. 

Mr. WALDEN. Thank you very much, Mr. Chairman. I want to 

thank the governors for being here today. My home State of Oregon 

has tried to innovate over the years. I was majority leader of the 

Oregon legislature when we implemented the Oregon health plan. 

I have been a small employer for 22 years and we paid for health 

insurance premiums for our workers, and I spent about 5 years on 

a community nonprofit hospital board, so I have sort of been on 

every seat at the table on health care reform trying to figure out 

how to make it more affordable and available. 

One of the things I recall from my days on the hospital board 

was the shift that occurs to the private sector insurance side when 

the government doesn’t reimburse enough, and that especially is 

true, I believe, on Medicaid, that it is probably the least reimbursement, so you have cost shifting going on from Medicaid and Medicare onto the private sector, which drives up then the insurance 

costs paid for by those who are trying to provide it, the small employers of America who, Governor Patrick, you expressed sympathy 

for. I am led to believe, and correct me if I am wrong, but the Commonwealth Fund has said that Massachusetts has the highest average family premiums in the country. Is that still the case? 

Mr. PATRICK. I don’t believe it is but I will say that we have 

trended about a point or so higher than the escalation even nationally over a decade. 

Mr. WALDEN. But as you have tried to bring everybody into the 

pool, your costs have continued to escalate beyond the original projections, right? 

Mr. PATRICK. No, not beyond the original projections, with due 

respect, Congressman, but the issue of premium increases is a 

problem, as I say, all across the Commonwealth and all across the 

country. 

Mr. WALDEN. Governor Barbour, I know that my senior Senator, 

Ron Wyden, and Governor Patrick, your Senator, Scott Brown, 

have teamed up to gives States more flexibility if they have their 

own plans. The President yesterday seemed to embrace that conVerDate Nov 24 2008 13:20 Aug 19, 2011 Jkt 037690 PO 00000 Frm 00112 Fmt 6633 Sfmt 6633 F:\112-011 OBAMACARE-PDF MADE\112-11 OBAMACARE-PDF MADE WAYNE
109 

cept, and I would be curious to hear from all three of you, does that 

go far enough? Is it helpful to give you that earlier out at 2014? 

And if not, what should we be doing? 

Mr. BARBOUR. Of course, the devil is in the details, but the thing 

that concerns me, the things that are in the statute we are told the 

States will still have to do, and Governor Patrick has been talking 

about how costs didn’t go up and he didn’t have people drop insurance. Well, Massachusetts already had a very, very expansive mandatory standard benefits package. Most States, particularly rural 

States, don’t, and if we get saddled with the standards benefits 

package like Massachusetts, that is why our employers will drop 

coverage because their premiums will skyrocket. So if it doesn’t 

give us relief from that and similar things, it is really not much 

help. 

Mr. WALDEN. Governor Herbert? 

Mr. HERBERT. Well, again, as I mentioned earlier, how flexible 

is flexible, and clearly there is not absolute flexibility. This is not 

a block grant, do it as you see fit. Maintenance of effort still required. The essential benefit package stays the same. The eligibility for Medicaid still is there. So if we get the outcomes that we, 

the Federal Government, say to the State, then you have got flexibility, and that really is not flexibility. 

Mr. WALDEN. Governor Patrick? 

Mr. PATRICK. I think from a policy point of view, Congressman, 

the act or the bill, we are probably indifferent to it because as I 

said, we are so far down the path, and we have so much flexibility 

under our existing 1115 waiver and there is plenty of flexibility in 

the act. 

Mr. WALDEN. So then I want to go to another topic. There are 

some reports out in the last day or two and over time about the 

waste and fraud both in Medicare and in Medicaid, upwards of 10 

percent of the program the GAO and the IGs have said is a result 

of waste. I met with some physicians in my district, an ambulance 

operator in another part of the State of Oregon who talked about 

some of the fraud and waste they saw occurring in Medicaid where 

somebody would feign a problem, call an ambulance, they would 

get to the emergency room so they could actually go to a shopping 

center nearby, and Medicaid gets to pay for it, and I heard that 

from three separate instances. What are you doing and is the Federal Government doing enough to get at that? We are talking, 20, 

30, 40, 50, $60 billion perhaps annually in waste and fraud identified by the GAO and others. 

Mr. BARBOUR. One of the things we have done is, we try to manage the program. We have reduced our error rate to 3.47 percent, 

which is the fourth lowest in the country. Our eligibility error rate 

is now one-tenth of 1 percent. Just by reducing our error rate as 

we have, we are saving the people of Mississippi tens of millions 

of dollars on Medicaid. If you got the national rate down to ours 

and got the national rate of Medicare down to ours, it would be 

tens of billions of dollars that the taxpayers would save just by 

managing the program. 

Mr. WALDEN. I think I am out of time, unfortunately. I would 

welcome your responses perhaps in writing afterwards but my time 

is expired. 

110 

Mr. UPTON. Mr. Green. 

Mr. GREEN. Thank you, Mr. Chairman. 

First, I want to mention again, and I know here that the health 

reform is not necessarily Obamacare. This committee spent many 

years dealing with health care, and as was said earlier, whether it 

be expanding community-based health clinics or the hours we spent 

over the last 2 years drafting that legislation. 

The testimony today sounds like the States want the Federal 

Government to write them a blank check and allow them to be left 

to their own devices to manage their health care programs without 

any guidance from the folks here in Washington who are going to 

have to vote for the money on how the federal tax dollars should 

be spent. I spent 20 years as a Texas legislator, State house and 

senate, and sat on that side many times and watched what happened, and let me give you some examples of what may not work. 

In 2003, Texas experienced a budget crisis much like we see now. 

At the time the State decided to drop 175,000 children off the 

SCHIP rolls because they couldn’t come up with the State match. 

The State of Texas gets about 65 percent of federal dollars for 

SCHIP enrollment and about 70 percent of federal dollars for Medicaid enrollment. The Texas Medicaid provides coverage at only 

minimum levels required by federal law for those eligible populations. Texas Medicaid eligibility is granted for 6 months and recipients must reapply and continue to meet all the eligibility requirements, but the problem is, every 6 months they have to show 

up down at our State Department of Human Services. Texas has 

been trying since 2008 for a section 115 waiver but it was even denied in 2008 by President Bush because it wanted to shift Medicaid 

eligibility of individual into private plans, and I know those private 

plans are going to have to make a profit to be able to do that so 

we will end up with scarce Medicaid dollars going to profit instead 

of going to help cover our poorest citizens. We have not recovered 

from the SCHIP disaster in 2003 and Texas still has the highest 

uninsured rate in the country, and I am a strong supporter of mandated 12 months’ continuous eligibility to prevent the States from 

using children oftentimes as budgetary pawns. 

Governor Patrick, can you explain the benefits you see in the 

Medicaid program under health reform? 

Mr. PATRICK. Well, first of all, Congressman, I agree with almost 

all the observations you make in terms of how we experience it in 

Massachusetts with the one exception of the private insurance. Our 

health reform is a hybrid so we emphasize private insurance including for Medicaid recipients, and so it is very much a marketbased kind of solution, I guess is what I am trying to say, which 

may be why I keep coming back to the point about how across the 

market whether for private or public payers, we have to focus on 

increased costs and what is happening with premiums and what 

that is doing to our competitiveness. This program has worked 

very, very well in Massachusetts. The fact that we have over 98 

percent of our residents insured today with reliable health care and 

that that has been maintained and improved even during a time 

of enormous economic uncertainty I think is something I am very 

proud of and I think has been a real help for us in our own recovery. 

111 

But the broader question of the cost of health care, not the cost 

of Medicaid, with due respect, that is a secondary question. The 

cost of health care for which in this country we spend 17.6 percent 

of what we spend has got to be addressed, and the Affordable Care 

Act gives us some tools to do that and we are trying some others 

on the State side as well. 

Mr. GREEN. Let me let the other governors answer because, like 

I said, I have been on both sides of the coin and there were times 

that we could bring down some Medicaid programs in Texas back 

in the 1980s and we would get 80 percent federal funding and only 

come up with 20 percent yet we still couldn’t do it in the State. So 

Texas does not have a rich Medicaid program by any means. So 

both Governor Barbour and—— 

Mr. BARBOUR. First let me say, I don’t mean any offense, but 

PPACA doesn’t come out too good in my accent of the name of this 

law, P-P-A-C-A. So I didn’t mean any offense by referring to it as 

Obamacare, it is just easier for me to say. 

Mr. GREEN. I understand. It works well on Fox for my Republican colleagues but it is really the Affordable Health Care Act, and 

we name things crazy but it is called health reform. That is the 

easiest thing. 

Mr. BARBOUR. Yes, sir. 

Mr. GREEN. And I don’t have any problem with your accent from 

where I come from. 

Mr. BARBOUR. Well, I figured if there was one guy here who 

would understand, it would be you. 

I would just say that we are concerned about keeping provider 

rates sufficiently high that they will see our Medicaid patients. 

Mr. UPTON. Mr. Terry. 

Mr. TERRY. Thank you, Mr. Chairman, and with my accent, I 

still call it Obamacare too. It is easier. 

My question is for Governors Herbert and Patrick, very quickly. 

The State exchange issue I think is an interesting issue and how 

States when you do it yourselves can be a lot more innovative. Particularly I want to ask Governor Herbert, because Nebraska and 

Utah are similar in population and demographics, would it be beneficial in a State exchange to have the opportunity to combine with 

other States and form a regional? I will let you go first and then 

Governor Patrick. 

Mr. HERBERT. Yes, I think it would be. I think you will increase 

purchasing power and the ability to have more competition and the 

consumer will have more options and better options for their own 

unique needs. Again, without beating a dead horse here, it is not 

a matter of is my approach better than Governor Patrick’s approach. Again, Mitt Romney is a friend of mine. In fact, we looked 

at the Massachusetts model when we started out. It just didn’t 

work for Utah. It was not in Utah’s best interest so we picked a 

different pathway. There are probably pros and cons of both of 

them. It is not a matter of I am right and he is wrong or vice versa. 

But as we work together as States, we can probably find solutions. 

We talk about, it is a little hard to define what is the health care 

reform message, what is the issue. I don’t think the public generally understands. Is it universal access, universal coverage, is it 

quality of care, is it affordability? It is probably all of the above. 

112 

We are tracking it here with the Affordable Health Care Act probably just in one narrow area of accessibility. I don’t know that it 

helps with the cost control measures. 

Mr. TERRY. I appreciate that answer. 

Governor Patrick and then Governor Barbour. 

Mr. PATRICK. I am really interested in that idea, Congressman. 

We have about 220,000 people who get their coverage through our 

Connector, our version of the exchange. I think that compares to 

about 1,500, am I right, in Utah? 

Mr. HERBERT. About a thousand. 

Mr. PATRICK. So it is a slightly different scale because we made 

different choices, and I agree with my colleague, Governor Herbert. 

I am not sure that every State in the context of the exchange needs 

to make the same choices but I think that flexibility is allowed 

under the Affordable Care Act. I am very intrigued about how we 

do more regional pools because, frankly, economically, our people 

are moving regionally. And the idea of having portability of their 

care I think is very responsive to their needs. 

Mr. TERRY. I appreciate that. 

Mr. BARBOUR. Congressman Terry, I just wanted to briefly comment on your question. My State senate has passed an exchange 

bill for 3 years running and the house has not. Both of them have 

passed a bill this year. We want an exchange. We don’t want—ours 

wouldn’t be anything like Massachusetts’. It would be market voluntary and modeled on Utah’s so there are—I just wanted you to 

know, even some of us that don’t have the exchanges think that 

they are useful but not the way the federal act would require it. 

Mr. TERRY. All right. Dr. Burgess, may I yield a minute to you? 

Mr. BURGESS. Thank you, Mr. Chairman. Governor Patrick had 

a question for me and Mr. Waxman was so rude, he wouldn’t yield 

time to you, so I will be happy to yield Mr. Terry’s time to you to 

ask you the question. 

Mr. PATRICK. Thank you, Dr. Burgess. I am good. No, you know, 

seriously, Mr. Chairman has changed. I am going to have to step 

away in order to get a plane, so unless you have a question for me, 

Dr. Burgess, I don’t want to—— 

Mr. BURGESS. Well, I was dying to answer your question and I 

didn’t want to leave the audience unfulfilled with you unable to ask 

me a question. 

Mr. PATRICK. Thank you very much. If it is appropriate, Mr. 

Chairman, if there are other questions after I have to leave that 

members may have, I would be happy to respond in writing. I just 

have to make this plane. 

Mr. PITTS. [Presiding] The chair thanks the gentleman for—— 

Mr. BURGESS. Let me just, in the remaining time I have, one of 

the issues that we lost out on in this health care reform was the 

issue of liability reform. I know I have over the years interviewed 

several doctors from Massachusetts who looked to move to Texas, 

even before we fixed the problem there. How are you dealing with 

this within your State? 

Mr. PATRICK. I mentioned earlier that we filed health care reform 

two in Massachusetts, which is the next chapter. It is really around 

cost control and cost containment, and there is a feature of this 

which is tort reform. It is not because we have found analytically 

113 

that defensive medicine is a big contributor to health care costs but 

it is a contributor, and so we used a model actually from Michigan, 

which is not caps, it is an apology and prompt resolution model. It 

has been piloted at Mass General Hospital in Boston, and they 

have had fantastic results. So it is a model that works for us and 

I am looking forward to working with the legislature. 

Mr. PITTS. The gentleman’s time is expired. The chair thanks 

Governor Patrick for coming. 

Mr. PATRICK. Thank you very much, Mr. Chairman. 

Mr. PITTS. And you will respond in writing to any questions? 

Mr. PATRICK. I would be happy to, yes, and I hope everyone will 

please excuse my—— 

Mr. PITTS. I thank the Governor and excuse him. The time now 

goes to the gentlelady from California, Ms. Capps, for 5 minutes. 

Mrs. CAPPS. Thank you, Mr. Chairman, and I had a really good 

question for you, Governor Deval. I am sorry that you are leaving. 

No, I understand. If there is a way you could stay, I would appreciate it. But you have been an excellent testifier. 

Mr. PATRICK. Can you try to do it quickly? 

Mrs. CAPPS. Yes, if you can sit back down. I am not going to 

make you miss your plane. 

Mr. PATRICK. Congresswoman, your answer was supposed to be 

‘‘No, Governor, I totally understand that you have to——’’ 

Mrs. CAPPS. Well, I have other questions to ask your colleagues. 

First of all, thank you very much for coming. We seem to be using 

this opportunity to scapegoat Medicaid because the real bottom line 

is that some people just don’t like this health care law, but you 

have been a success story in reducing the number of uninsured and 

helping everyone who wants to get any access to the health care 

system. My other questions are going to be about children. Your 

State has the lowest rate of uninsured children in the Nation with 

over 95 percent in the State having health insurance. I think that 

is really an achievement. And I want just to ask you, and you can 

be quick and then run off. I don’t want you to miss your plane. But 

what is the role that Medicaid has played in this? 

Mr. PATRICK. Well, it has been enormous. The proportion of children insured today is actually 99.8 percent, and—— 

Mrs. CAPPS. That is stunning. I just want it to be on the record. 

Just say it again. 

Mr. PATRICK. Well, 99.8 percent of Massachusetts children have 

health insurance today, and I am very, very proud of that. Now, 

Governor Barbour made a point which is true, that children are 

relatively inexpensive to cover and it is a very efficient kind of coverage for Medicaid. It has made a big difference for us. 

Mrs. CAPPS. Thank you. We are worried about you catching your 

plane, and I do appreciate your taking the time. 

I wanted to ask unanimous consent as I continue my question— 

thank you, Governor—— 

Mr. PITTS. Without objection. 

Mrs. CAPPS [continuing]. To insert a letter from the March of 

Dimes for the record, which explains the importance of the Medicaid program for women and children, and I ask unanimous consent if that could be entered. 

Mr. PITTS. Without objection, so ordered. 

114 

Mrs. CAPPS. Thank you. 

[The information follows:] 

115 


66822.075
116 


66822.076
117 

Mrs. CAPPS. Governor Barbour, I understand that you have said 

in your remarks that you support the repeal of the Medicaid State 

responsibility requirements, the maintenance of efforts requirements in the Affordable Care Act. When it comes to infant mortality, that means babies dying during childbirth or in the first few 

months of life. Our Nation has a very abysmal record among countries of the world. We rank 46th among all the nations of the 

world. Now, when it comes to the United States, Mississippi has 

the highest rate of infant mortality of any State in the United 

States, 10.7 infant deaths per 1,000 live births. Now, if Congress 

eliminated the Medicaid maintenance of efforts, you would have 

the flexibility to reduce Medicaid coverage for pregnant woman and 

infants up to age 1 from the current level of 185 percent of federal 

poverty line to 133. Mississippi also has the highest rate of preterm 

births of any State in the United States and again, our country 

doesn’t do well on this topic so I am not trying to pick on Mississippi, but nearly 19 percent of live births in Mississippi are 

preterm. Now, preterm infants are at a much greater risk of health 

complications, newborn death and even higher health care costs. I 

am one who believes that our country’s infant mortality rate is a 

national disgrace. Even during the Bush Administration in 2006, 

an HHS fact sheet stated that programs to improve access to prenatal and newborn care could help prevent infant mortality, and it 

specifically cited Medicaid. 

So if I could ask you a yes or no question, do you agree with this 

assessment by the Bush Administration that Medicaid can help us 

address infant mortality? 

Mr. BARBOUR. A little bit. 

Mrs. CAPPS. A little bit? All right. 

Mr. BARBOUR. That is correct. I mean, most of—ma’am, if I could 

respond? 

Mrs. CAPPS. Of course. 

Mr. BARBOUR. The biggest problem we have in my State is we 

have an extremely high rate of illegitimacy. We have a lot of children being born to mothers who are themselves in bad health—— 

Mrs. CAPPS. That is another piece. 

Mr. BARBOUR [continuing]. Maybe because of life choices like 

drugs—— 

Mrs. CAPPS. Absolutely. 

Mr. BARBOUR [continuing]. Alcohol, and it is not the health care 

system that is the principal driver here. 

Mrs. CAPPS. But actually if these mothers received adequate prenatal care, some of these underlying issues could be addressed, and 

that is another feature—— 

Mr. BARBOUR. Yes, ma’am, and we offer it for free—— 

Mrs. CAPPS [continuing]. Of Medicaid—— 

Mr. BARBOUR [continuing]. For up to 185 percent, yes, ma’am. 

Mrs. CAPPS. But now you will have the flexibility—— 

Mr. BARBOUR. A lot of them don’t take it. 

Mrs. CAPPS. Well, that is another issue, but the flexibility to 

raise it is going to make it tempting for States to do something 

that will be in the long run costly, costly not only in lives but also 

to the bottom line of the State’s budget. 

118 

Mr. BARBOUR. The majority of all the people on Medicaid in Mississippi are children or pregnant women, and it is up to 185 percent of poverty. We are not interested in lowering it, but the biggest problem with our sick children at birth, low-weight birth is not 

the health care system. 

Mr. PITTS. The gentlelady’s time is expired. 

Mrs. CAPPS. I yield back. 

Mr. PITTS. The chair recognizes the gentleman from Pennsylvania, Dr. Murphy, for 5 minutes for questions. 

Mr. MURPHY. Thank you, Mr. Chairman, and welcome, Governors. Good to see you again. 

I want to go over a couple things about Medicaid expense in your 

State. In my State, Pennsylvania, Governor Corbett estimates that 

about 600,000 will eventually be $150 million per year. Do you 

both have estimates in your States of what those numbers might 

be of an additional Medicaid expense from this bill? 

Mr. BARBOUR. When it is full out, $443 million in year 10. 

Mr. MURPHY. So that is what it will be. 

Mr. BARBOUR. One year. 

Mr. MURPHY. Sir? 

Mr. HERBERT. And ours is $1.2 billion over 10 years. It is a 50 

percent increase in our numbers. 

Mr. MURPHY. So that is the full cost of Medicaid in both your 

States, or that is in addition? 

Mr. BARBOUR. That is the increase. 

Mr. HERBERT. That is the increase out of our general fund.added 

onto Medicaid, and it is going to cost the State an additional $100 

million to 

Mr. MURPHY. Now, we also know that the Congressional Budget 

Office, which admittedly can only deal with the data they are 

given, they are not allowed to surmise or assume anything, but 

based upon the data they were given when this bill passed, they 

estimate about 9 million low-income employees would lose coverage 

due to some of the exemptions that occur, but Lewin Group now 

says it could be as high as 85 million, and some questions are that 

if employers are fined $2,000 per employee for not offering qualified health insurance, that it might actually serve as an incentive 

to expand those numbers up to that upper level of 85 million or so. 

So are your numbers that your States have based upon some of 

these higher or lower numbers? I am just curious in terms of the 

actual population you think might pick up. How confident are you 

on the accuracy of those numbers, that might it even be higher? 

Mr. HERBERT. Well, I don’t know the numbers that you have 

given there but our estimates are based on the fact that we are 

going to have to increase eligibility up to 133 percent of poverty. 

We are not covering that much in Utah. 

Mr. MURPHY. I see. 

Mr. HERBERT. And the essential benefit package would have to 

be changed and modified and enriched, and so we are going to have 

to give more and so that is going to add to the cost. 

Mr. MURPHY. My question is, what happens, if anybody has 

looked in your States, if more employers drop their coverage and 

put people on Medicaid? 

119 

Mr. HERBERT. Well, if more employers drop their coverage, then 

clearly the eligibility will entice people to use Medicaid as the insurer and so our numbers will go up. I don’t know what the percentage of that would be. 

Mr. MURPHY. Governor Barbour? 

Mr. BARBOUR. I am concerned that we underestimate the actual 

increase in cost, but as I said earlier, we have a lot of small businesses that offer insurance to their employees right now that won’t 

meet what we fear the standard benefits package will be, and for 

a lot of people, they will just pay the $2,000. 

Mr. MURPHY. Let me ask you then another area, because some 

of the talk has been, should—and I know, Governor Barbour, in 

your testimony and your written testimony too you talked about 

the delays in getting waivers taken care of, the delays in responses 

that are interminable. You mentioned things about the medical 

school and you talked about physical exams, the requirement is not 

there. If this money came to the States in the form of a block grant 

and said if you could design Medicaid the way you would want to 

do it—granted it was designed in 1965, and that was back in the 

era when a hospital that had an X-ray machine on wheels was considered pretty modern—but if you could redesign it, would your 

States want that authority? Do you think you could modernize 

things and deliver better health care quality to more people at a 

lower cost? Do you think you could? 

Mr. BARBOUR. We think we would have a better fit for our State, 

we could move more toward an insurance kind of model, but we 

don’t think it would just be better quality care, we could save you 

money. As I said at the beginning, we would take a 50 percent reduction in the annual increase, and that is a lot of money over time 

in savings for the American taxpayers. If we could cut the rate of 

Medicaid spending going up in half, and we would be willing to 

have a block grant and us take that risk. 

Mr. MURPHY. Well, let me ask specifically then in terms of one 

of the things you mentioned, Governor Barbour, in your testimony 

about requiring Medicaid patients to have an annual medical 

exam. What benefits would you feel that would have in terms of 

improving quality? 

Mr. BARBOUR. Well, for so many people, they would just have a 

better understanding, particularly older people would have a better 

understanding of what their health risks were and are. They would 

learn more. We would try to give them a briefing about their medicines, but they could get much farther along on that, but for a lot 

of them, they would find out things they don’t know. If you go to 

the emergency care for your care, that is the worst place for primary care. It isn’t just expensive, it is not designed for primary 

care. So it would help these people, a lot of people, have a better 

quality of life. 

Mr. MURPHY. Governor Herbert, how about in your State? What 

about Utah? 

Mr. HERBERT. Well, again, I think we can do it better. I would 

advocate for States to be able to be the innovators and creators of 

success. You know, it boils down to me just the simple principle, 

do you trust the States, do you trust the governors to do this, and 

some of you do and some of you don’t. Some of you are a little 

120 

drawn aside about turning the reins over to the States, and I think 

we have proven the ability to in fact provide good service. We balance our budgets. We are out there growing the economy. We are 

doing things that we need to be doing in our respective States with 

our own respective different demographics. I have a young State. 

Our median age is only 28.8 years of age. I have a whole different 

demographic to deal with on health care than other States that 

may have a more aging population. So again, that is why I think 

let States and governors deal with it. I think that would find success that we otherwise would not have. 

Mr. PITTS. The gentleman’s time has expired. 

Mr. MURPHY. Thank you. 

Mr. PITTS. The chair recognizes the gentleman from Pennsylvania, Mr. Doyle, for 5 minutes. 

Mr. DOYLE. Thank you, Mr. Chairman. It was interesting to hear 

from Governor Patrick about the economic impact of health care 

coverage in Massachusetts. It seemed to me that while we all know 

that providing our most vulnerable Americans access to health care 

will save individual families from extreme economic hardship due 

to medical costs, there is apparently also a larger economic role 

that health care coverage plays. Looking at the Massachusetts 

model after they rolled out their extensive plan, the number of uninsured shrank to an impressive 2.7 percent statewide, and uncompensated care costs went down by 38 percent. That hardly seems 

like a failed health care program to me. In 2009, nationwide uncompensated care costs were $40 billion. If Massachusetts is an example of the nationwide effect, we are talking about a potential 

savings of $15 billion as we lower the rate of uninsured in the 

country. 

Similarly, it seems to me that cutting back on Medicaid and leaving more people without any type of insurance is shortsighted at 

best and more likely flat-out dangerous. As we all know, $1 cut 

from Medicaid means $2.33 cut from the State’s economy. 

You know, it is discouraging to me that the majority continues 

to spend time arguing taking away health care from our most vulnerable when what we really need to focus on is creating jobs and 

incentivizing economic growth. In my State of Pennsylvania, where 

the uninsured rates are nearly 20 percent, we could save hundreds 

of millions of dollars adopting the Massachusetts model, hardly, in 

my opinion, a failed health care model. 

Mr. Chairman, I want to yield the balance of my time to Mr. 

Weiner for questions. 

Mr. WEINER. I thank the gentleman. 

Mr. Barbour, perhaps you and I should both have those white 

things they have at the U.N. so you could understand my Brooklyn 

accent and I can understand yours. 

Mr. BARBOUR. We would need an interpreter. 

Mr. WEINER. But I just want to ask you a couple of questions. 

I didn’t hear you respond, the governors respond, about this question about tort reform. You don’t want federal tort law to supplant 

and supersede State tort law, certainly, right? 

Mr. BARBOUR. I thought the question was, what happened when 

we did this in our State, and it has been very, very, very beneficial. 

121 

Mr. WEINER. Would you agree, I assume you would, that you 

want State law to supersede federal law? You don’t believe there 

should be a federal tort law, do you? 

Mr. BARBOUR. I think in federal cases, I think there ought to be 

a federal tort law, if it is about federal law. 

Mr. WEINER. Mr. Barbour, as you know, there is no such thing 

as a federal tort right now. 

Mr. BARBOUR. Well, if you go into federal court in Mississippi 

and a case arises in the State, State law prevails. We wouldn’t 

want to change that. 

Mr. WEINER. If I can take back my time, medical malpractice is 

a State law. Are you aware of that? 

Mr. BARBOUR. That is correct. 

Mr. WEINER. OK. So you don’t want federal law to supersede 

State medical malpractice tort law? 

Mr. BARBOUR. Not in State cases. 

Mr. WEINER. I didn’t think you did. Can I ask you this question? 

From the conversation we are having here, you would think you 

have any additional costs at all before 2017. Are you both aware 

that you don’t, you have no additional costs before the year 2017? 

Mr. BARBOUR. That is why I said, sir, when I was trying to say 

what the costs were, they are so back-loaded. 

Mr. WEINER. Right. Let me ask you this question. Do you anticipate in the future Mississippi will have more or fewer poor people 

with you as governor? 

Mr. BARBOUR. It depends on the national economy. As long as we 

have got the economy we have got now, we are going to have—— 

Mr. WEINER. I am just curious because—— 

Mr. BARBOUR. We are going to have more—— 

Mr. WEINER. No, I understand, but is it your policy, Governor, 

to reduce the number of poor people in your State? 

Mr. BARBOUR. The policy of our State is to grow the economy and 

have more people working. 

Mr. WEINER. Is that a yes, sir? 

Mr. BARBOUR. It should be the result. 

Mr. WEINER. It is more or less a rhetorical question. Of you endeavor to have fewer poor people. That would make you a more 

successful governor, maybe even a candidate for higher office. If 

you have fewer poor people, wouldn’t your Medicaid costs go down? 

Mr. BARBOUR. Well, when we added 60,000 employees my first 

3 years as governor, yes, sir, people went off the rolls. Our Medicaid costs—— 

Mr. WEINER. Right. So for your—— 

Mr. BARBOUR [continuing]. Were better under control. 

Mr. WEINER. So if after 2017 you have fewer poor people than 

today, your Medicaid costs will go down, won’t they? 

Mr. BARBOUR. Well, no, they will actually go up because we are 

going to put all these people on Medicaid under the Affordable 

Care Act that are not—— 

Mr. WEINER. All right. I will put it this way. 

Mr. BARBOUR [continuing]. That are not on it now. 

Mr. WEINER. Well, let me put it in terms of the law. Under the 

Affordable Care Act, people eligible will have, a family of four making $30,000 a year will be the maximum coverage under the inVerDate Nov 24 2008 13:20 Aug 19, 2011 Jkt 037690 PO 00000 Frm 00125 Fmt 6633 Sfmt 6633 F:\112-011 OBAMACARE-PDF MADE\112-11 OBAMACARE-PDF MADE WAYNE
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crease under the Affordable Care Act starting in 2017 when the 

Federal Government stops absorbing 100 percent and absorbs 95 

percent of that. If your number of poor people goes down a sufficient amount if you are a good governor and your number of poor 

people goes down, your Medicaid costs will go down, won’t they? 

Mr. BARBOUR. The definition of ‘‘poor’’ and eligible for Medicaid 

are two different things. The number of people eligible for Medicaid 

will go up. 

Mr. WEINER. Thirty thousand for a family of four will be the new 

limit. If it goes down and you do a good job as governor, fewer poor 

people, lower Medicaid. I would endeavor that—— 

Mr. PITTS. The gentleman’s time has expired. 

Mr. BARBOUR. Not compared to today, Congressman. 

Mr. WEINER. Well, that is exactly the number I gave you is the 

new law. 

Mr. PITTS. The gentleman’s time is expired. The chair recognizes 

the gentleman from Texas, Dr. Burgess, for 5 minutes for questions. 

Mr. BURGESS. I thank the chairman for the recognition. 

I thank you both for being here. I just wanted to clear up your 

concern about what we call this law, and I was too. In fact, I spent 

a long night before the Rules Committee trying to get the word ‘‘affordable’’ struck from the title on a germaneness issue because I 

couldn’t see how ‘‘affordable’’ was germane to the bill in front of the 

Congress, but I wasn’t allowed to proceed with that. So we are 

stuck with what it is called. 

Governor Herbert, you referenced the need to expedite the Supreme Court review of the constitutional challenge to this law that 

was passed just less than a year ago. Now, when Judge Vincent in 

Florida issued his opinion just a few weeks ago, he said that injunctive relief was not necessary, that his declaratory judgment 

was all that was required because officers of the Federal Government would comply with the wishes of the court. Now, was he not 

correct in that statement? 

Mr. HERBERT. Well, he may be, he may not be. That is still yet 

to be determined. The process is not completed yet. I know some 

States are taking the position that he is in fact accurate on injunctive relief. Others are saying it is not. And so for me as a State 

speaking for Utah, it is kind of like we are sitting on some shifting 

sands. We don’t really know. 

Mr. BURGESS. Because under normal circumstances, it would be 

likely June of 2012 before that Supreme Court ruling would occur. 

If I am to understand things correctly, officers of the Federal Government are not complying with the spirit of the law in that implementation of the law is still proceeding at a fairly rapid rate so this 

thing will be down the road another 18 months, and then if it is 

struck down, you will be asked to unwind under a court order, unwind all of the things that have occurred under the Affordable Care 

Act and it will be difficult to dissect out what you were doing with 

the State exchanges before the law went into effect and now what 

has been struck down by the Supreme Court. Is that correct? 

Mr. HERBERT. That would be correct. Again, the uncertainty is 

really a problem for us to know which way to go and what to do. 

123 

Mr. BURGESS. Again, I really do thank both of you for being here 

and there are so many things that could come up. 

In your written testimony, Governor Herbert, you talked about 

you wanted to get to a point where you pay for value. Now, are you 

aware that Donald Berwick, the head of Centers for Medicare and 

Medicaid Services, has testified that he too wants to go to a system 

that he pays for value? Have you two communicated on this point? 

Because he is the federal head of the Medicaid program. 

Mr. HERBERT. He and I haven’t. There may be some communication with our staff and our Medicaid people but he has not talked 

to me. 

Mr. BURGESS. It seems to me that there is the common ground. 

Now, you also talked in your written testimony about what the accountable care model—I am sorry—the ACO model may be for 

Utah, and I don’t disagree with that. The rules, unfortunately, that 

were due last September on accountable care organizations are still 

pending so it is kind of like the dog ate my homework over at HHS. 

We haven’t got that to you yet. How are you able to proceed with 

this without the certainty of what the federal rules will be? 

Mr. HERBERT. Well, it is very difficult. In fact, as mentioned earlier about the high-risk pool, and we had to wait about 6 weeks trying to get questions answered on high-risk pool and whether we 

should implement. We already had one in the State. Part of the Affordable Care Act requires a federal high-risk pool. But the answer 

came back, we can’t answer that question, we haven’t had a chance 

to read the bill. 

Mr. BURGESS. Governor Barbour, you had some interesting comments about the high-risk pool at the National Governors Association on Sunday. Could I get you to quickly summarize those, about 

the number of people—— 

Mr. BARBOUR. Well, there may—— 

Mr. BURGESS [continuing]. That you were covering and the number that are covered now? 

Mr. BARBOUR. It makes Governor Herbert’s point about the need 

for a quick decision by the Supreme Court because we were required to create a second high-risk pool in Mississippi to comply 

with this law, even though we had had one since the mid-1990s. 

It insured 3,600 people. And we were forced to add another one and 

now in the course of however long it has been in effect, 58 people 

have signed up when they could have just taken our high-risk pool 

and not forced us to have another one. 

Mr. BURGESS. The simplicity could be absolutely stunning in 

that, and actually Nathan Deal and I last year had legislation to 

try to do that but it didn’t fly, unfortunately, with the Affordable 

Care Act. 

Let me just point out, Representative Weiner’s comments about 

the State sovereignty on medical liability. There is of course a federal program called Medicare, and Medicare is equally administered across all of the States without regard to State sovereignty. 

Would it be possible to set up a medical liability system within 

Medicare, within that federal program, say, perhaps, patterned 

after the Federal Tort Claims Act that is in effect for the federally 

qualified health centers that could provide some relief to your practitioners on medical liability costs? 

124 

Mr. BARBOUR. Yes. 

Mr. HERBERT. I think so. It is an interesting idea, and I am not 

an attorney, I don’t play one on TV, so I don’t know if I can comment on that. 

Mr. PITTS. The gentleman’s time has expired. The chair recognizes the gentleman from Washington, Mr. Inslee, for 5 minutes for 

questioning. I am sorry, Ms. Schakowsky for 5 minutes. 

Ms. SCHAKOWSKY. Thank you, Mr. Chairman. 

Illinois Governor Quinn has sent a statement from Illinois that 

outlines the many benefits of the Affordable Care Act. Among other 

things, he points out that the Medicaid expansion will cover 

700,000 new adults who will have health insurance coverage, many 

for the first time in their adult lives. He adds, ‘‘The Affordable 

Care Act is helping to make comprehensive health insurance affordable and accessible to all Americans while providing the flexibility to allow governors to implement innovative policies that benefit the citizens of each unique state. In Illinois, we do not see the 

Affordable Care Act as an alternative or distraction to the urgent 

need for jobs and economic growth. We saw the law as a vital part 

of our economic recovery.’’ 

Mr. Chairman, I ask unanimous consent that Governor Quinn’s 

full statement be included in the hearing record. 

Mr. PITTS. Without objection, so ordered. 

Ms. SCHAKOWSKY. Thank you. 

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Ms. SCHAKOWSKY. Governor Barbour, you have talked about the 

reason that infant mortality rates, et cetera, are up in Mississippi 

and also you were talking about in terms of Medicaid we have people pull up at the pharmacy window in a BMW and say they can’t 

afford their copayment. Well, first of all, let me say that the Federal Government has made fraud in Medicare and Medicaid a top 

priority and has for the first time really put resources into doing 

that. But would you say that Mississippi uniquely? Because other 

States, it is really provider fraud that is the bulk of the fraud that 

goes on in Medicare and Medicaid asking for reimbursements of 

care that really wasn’t given or prescription drugs. Would you say 

in your State it is your people who are defrauding the big problem 

in fraud? 

Mr. BARBOUR. Congresswoman, my understanding is that that is 

not considered fraud, that in the federal rules if a person says they 

can’t afford to pay the copayment, the provider can’t challenge it, 

and of course, the sad thing about that for us is, the State doesn’t 

save any money, it is the provider who gets shorted, but I report 

that because providers report it to me. It is not my understanding 

that that is, quote, fraud under the federal law. We have really 

done a good job of tamping down on our error rate, including fraud. 

Ms. SCHAKOWSKY. So it is really people trying to—you know, it 

is about poor people or not-so-poor people trying to cheat the system that has been the big problem? 

Mr. BARBOUR. We certainly had a problem at one time of people 

who were not eligible being on the program, and it was the State’s 

fault because the State was not following the rules, but do we have 

provider fraud? Yes, ma’am, we do, and we also have waste from 

providers as well. 

Ms. SCHAKOWSKY. Which all of us, I think, agree we have to go 

after. 

You know, in Illinois we get a 50 percent match of federal dollars 

in our Medicare program. Mississippi gets almost 75 percent 

match. Utah gets about 71 percent match. As a matter of fact, for 

federal spending, Mississippi gets $2.02 back for every dollar in 

federal taxes it pays. Utah gets about $1.07. Illinois gets about 75 

cents back. So we don’t do as well as you do. 

But do you not think that the fact that 75 percent of the dollars, 

for example, Governor, comes from the Federal Government that 

maybe the Federal Government has some right to set some parameters, or no? 

Mr. BARBOUR. Sure, the Federal Government should have some 

right to set some parameters. I think the Federal Government 

overruns the program by far. I don’t think that is unique to Mississippi. We get 75 cents because we are the poorest State in the 

country. We would love to trade with Illinois and be a much richer 

State and get a smaller percentage, but for us, the beauty is, you 

all would save a lot of money if you would let us manage the program and reduce our costs. You would get $3 out of 4 of the savings. 

Ms. SCHAKOWSKY. Well, actually, I wanted to mention that with 

Governor Herbert. You were talking about your support for federalism and the pitch to let Utah be Utah, but actually Medicaid 

already gives you a great deal of flexibility in designing your proVerDate Nov 24 2008 13:20 Aug 19, 2011 Jkt 037690 PO 00000 Frm 00132 Fmt 6633 Sfmt 6633 F:\112-011 OBAMACARE-PDF MADE\112-11 OBAMACARE-PDF MADE WAYNE
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gram. You can design your delivery system. You can set payment 

limits. You can do cost-sharing limits and benefits, and even prescription drugs are optional. So what are you saying? Just completely hands off, the Federal Government should not have a right 

to set some sort of limits? 

Mr. HERBERT. Well, clearly you have a right, and I respect that 

right. It is a matter of, is there a better way? I think we ought to 

be more coequal partners in discussions of what the process is. I 

stipulate that the intention and objections of Medicaid and the 

health care reform act are designed to help the people. We all want 

that same goal. What we differ about is process. 

Ms. SCHAKOWSKY. And yet both of you say you would rather see 

it repealed, right? 

Mr. BARBOUR. The PPACA? Yes, ma’am. 

Mr. HERBERT. I believe that parts of it are unconstitutional. I 

don’t think we want to have an unconstitutional law on the books. 

Mr. PITTS. The gentlelady’s time is expired. 

Our time is limited. The governors’ time is limited. We want to 

thank the governors for their testimony. It has been an excellent 

panel. Before we adjourn, we have a couple of housekeeping items. 

The chair recognizes the ranking member, Mr. Waxman, for a 

unanimous consent request. 

Mr. WAXMAN. Mr. Chairman, we have had letters from many different groups supporting maintaining Medicaid eligibility. We have 

a statement from the SEIU opposing repeal of the maintenance of 

effort and requirements of the ACA for Medicaid. I would like to 

have that as part of the record. 

Mr. PITTS. Without objection, so ordered. 

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Mr. WAXMAN. And I did want to take a second or two to talk 

about the Medicaid citizen documentation. I think the statement by 

Mr. Barton was incorrect. States have two ways to establish whether someone is an actual citizen. One could be submit a name, Social 

Security number, date of birth, then go to the Social Security Administration for verification, and if the Social Security records 

match, the individual meets the documentation requirements. As of 

February, 33 States including Mississippi and Michigan have elected this option. In the alternative, a State can require an individual 

provide either a U.S. passport or a birth certificate and a driver’s 

license or other photo ID. In no case may an individual self-declare 

citizenship or legal immigration status. 

Thank you, Mr. Chairman. 

Mr. PITTS. Without objection, so ordered. 

The gentleman, Mr. Bass, would like to insert for the record a 

study on how to reduce Medicaid drug prices, and Mr. Griffith from 

Virginia has a letter from the Governor of Virginia to insert in the 

record. Without objection. 

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Mr. GINGREY. Mr. Chairman? 

Mr. PITTS. Dr. Gingrey? 

Mr. GINGREY. I have a letter also from our former colleague, Governor Nathan Deal of the State of Georgia, who has some very interesting comments in his letter. I would like to submit it for the 

record. 

Mr. PITTS. Without objection, that will be inserted in the record. 

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Mr. PITTS. Members will have 10 legislative days to submit questions for the record. I ask that the witnesses please respond 

promptly to these questions. Without objection, so ordered. 

The hearing is now adjourned. 

[Whereupon, at 12:08 p.m., the committee was adjourned.] 

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