Speeches & Floor Statements

Floor Remarks of U.S. Senator Lamar Alexander (R-Tenn.) -- Health Care Reform

Posted on June 16, 2009

Madam President, I am looking for a way to offer an amendment to the health care bill that would sentence every Senator who votes to increase Medicaid eligibility to 150 percent of the Federal poverty level to a term of 8 years as Governor in his or her home State, so they can have an opportunity to manage the program, to raise taxes, and to find a way to pay for that sort of proposal. If we Senators were to increase Medicaid in that way, and go home, we would find first that Medicaid is a terrible base upon which to build an improved health care system, because it is filled with lawsuits. It is filled with Federal court consent decrees that sometimes are 20 and 25 years old and take away from the Governor’s and the legislature’s authority to make decisions. It is filled with inefficiency. It is filled with delays. Governors request waivers to run their systems, and it may take a year or more for approval from the Federal Government for relatively simple requests. And finally, it is filled with an intolerable waste of taxpayer money because of fraud that is documented by the General Accountability Office. As much as 10 percent of the entire program -- $32 billion a year -- according to the General Accountability Office is lost to fraud. That is the Medicaid Program. The second thing a Senator who goes home to serve as Governor for 8 years would find is that increasing coverage in this way will require much higher State taxes at a time when most every State is making a massive cut in services, and a few States are nearly bankrupt. For example, in my State of Tennessee, if the Kennedy bill were to pass, which would increase Medicaid expansion by 150 percent and increase reimbursement rates to 110 percent of Medicare, it would require, based on our estimates, a new State income tax of about 10 percent to pay for the increased costs just for our State, as well as perhaps adding another half a trillion dollars or so to the Federal debt. Finally, if we were to base new coverage for the 58 million people now in Medicaid, and others who need insurance, upon this government-run Medicaid Program these Americans -- who are the people we are talking about in this debate and who are the ones we hope will have more of the same kind of health care the rest of us have -- we would find that a large number of them would have a hard time finding a doctor. Today 40 percent of doctors already refuse to provide full service to Medicaid patients because of the low reimbursement rates, and if we simply add more to that Medicaid Program, these people will have an even harder time getting served. There is a better idea. Instead of expanding a failing government health care program which traps 58 million of our poorest citizens in that government-run program that provides substandard care, the better way to extend medical care to those low-income Americans now served by Medicaid is to give them government tax credits, or government subsidies, or vouchers, or money in their pockets they can use to purchase private health insurance of their choice. That sort of option for health care reform is before the Senate, if it could only be considered. It has been offered on one end by Senator Coburn and Senator Burr. It has been offered at the same time by Senator Gregg of New Hampshire. It has been offered in a bipartisan way by Senator Wyden and Senator Bennett who have offered a proposal that would basically give these dollars to the people who need help, let them buy their insurance, and according to the same Congressional Budget Office that said the Kennedy proposal costs at least 1 trillion more dollars, the CBO has said that Bennett-Wyden would cost zero more. Madam President, during the last 6 months, the four words we have heard most in Washington are "more debt" and "Washington takeover," and all four words apply to the health care debate. We have seen a Washington takeover of banks, of insurance companies, of student loans, of car companies, and now, perhaps, of health care. The President insists on a government-run insurance option as part of a health care reform plan which would inevitably lead to a Washington-run health plan. Why would it do that? Well, putting a government-run and subsidized plan in competition with our private health insurance plans would be like putting an elephant in a room with some mice and saying: OK, guys and gals, compete. I think we know what would happen. The elephant would win the competition and the elephant would be your only remaining choice. As for more debt, the Congressional Budget Office, in a letter sent to Senator Kennedy, estimated that his bill, which is the only legislation the Senate Health Committee is considering, would add another $1 trillion during the next 10 years in order to cover 16 million uninsured Americans, leaving 30 million uninsured. That is another $1 trillion over the next 10 years that, according to yesterday's Washington Post, already is nearly three times as much as was spent in all of World War II. The Post said the proposed new debt over the next 10 years, before we get to the health care bill, is three times as much as we spent in World War II. The Congressional Budget Office estimate didn't even consider the cost of the Kennedy bill's proposals to expand Medicaid coverage. So let's talk about Medicaid. Every State offers it. It provides health care in a variety of ways to low-income Americans who are not eligible for Medicare. The Federal Government pays about 60 percent of the costs and writes most of the rules; the States pay the rest. Fifty-eight million low-income Americans are trapped in Medicaid. It is the only place of any significant size where we don't have competition in our health care system. Think of the elephant in the room. It was my experience as Governor -- I believe it is for most Governors -- that it is not only an administrative mess with substandard care, the Medicaid Program, but its costs have spiraled out of control, threatening the viability of public universities and community colleges because there is no money left for the States to support them. Here is what would happen in Tennessee if the Kennedy bill passed, according to the State of Tennessee's Medicaid director. Our State costs would go up $572 million if we increased coverage to 150 percent of Federal poverty. If the Fed pays for this, the Fed's cost would be $1.6 billion -- I mean the Federal budget paying for all of it, because normally the Federal budget pays two-thirds, the State one-third. If the State has to also provide Medicaid payments to physicians at 110 percent of Medicare, this would add another $600 million in costs to the State of Tennessee. Thus, the proposal of the combination of the Health and the Finance Committees' bills that are being considered would be 1.2 billion new dollars for Tennessee. If you add the Federal Government's increase in costs just for the Tennessee program to which the Tennessee program was expanded, it would be $3.3 billion. So you can see why the Kennedy bill has been called so expensive. That is not all. The Finance Committee has been discussing turning back to the States by 2015 these increased costs, although the Finance Committee is talking about a smaller expansion of coverage. So imagine a Senator going home to the State of Tennessee -- it won't be me, because I have already had the privilege of being Governor -- but say if one went back to be Governor of Tennessee, what would one find if we passed the Kennedy bill as it is now proposed? We would find a bill by 2015 of 1.2 billion in today's dollars, and where would the Governor get the money? Well, when one Governor proposed a 4-percent State income tax in Tennessee in 2004, a 4-percent income tax would bring in $400 million new dollars. We need $1.2 billion under the Kennedy bill to pay for the expansion of Medicaid. So to raise nearly $1.2 billion, a new State income tax of more than 10 percent would be needed, if all other services were held flat, and the Governor has already said that most State functions will see a decrease in funding after the stimulus money goes away. This same problem would be true for all States. The National Governors Association says if we assume that all individuals under 150 percent of poverty are covered and there is no change in reimbursement rates, the cost to the States would be $360 billion more over the next 10 years. If you also increase the reimbursement rate for physicians from say 72 percent to 83 percent, the Governors Association says the new cost is $500 billion more over 10 years. Then there is the fraud in the Medicaid Program. The Government Accountability Office says 10 percent of it is fraud -- $32 billion a year -- about three-fourths of the amount we spend on prescription drugs for all seniors. Then there is the problem of access of care, with 40 percent of doctors already not being willing to provide full service to patients who are on Medicaid. So why would we expand this government-run program when it is filled with inefficiencies, delay, and waste, when it would bankrupt States, when it would add hundreds of billions of dollars to the Federal debt, and when it would provide substandard service when, instead, we could pass the Coburn-Burr bill, or the Gregg bill, or the Wyden-Bennett bill and give to the 58 million low-income Americans who are trapped in a failing government program the dollars they need to purchase private health insurance much like the rest of us have? I hope I can find a way to offer an amendment that would require any Senator who votes for a 150-percent increase in Medicaid, who says that Medicaid expansion will go to 150 percent of the Federal poverty level, will be sentenced to go home and serve for 8 years as Governor of his or her State so they can find out what it is like to manage such a program or to raise taxes to pay for it. I ask unanimous consent to have printed in the Record following my remarks the letter from Douglas Elmendorf of the Congressional Budget Office to Senator Kennedy of June 15 stating that his bill would add $1 trillion more over the next 10 years to the debt, and that doesn't even include the Medicaid expansions I have talked about. I also ask unanimous consent that an article from the Wall Street Journal of yesterday talking about State budget gaps, which shows what dire straits many States are in be printed in the Record.