President Obama Tries To Make Nice To State Governors

Stanley Feld M.D.,FACP,MACE

President Obama is starting to believe. State Governors, both Democratic and Republican, are serious about trying to balance their budgets. He also understands that the proposed cuts in services and reimbursements for Medicaid eligible patients will torpedo his healthcare reform act.

President Obama cannot afford to lose state support for his Medicaid law.

Kathleen Sebelius , Secretary of Health and Human Services said in a letter to state governors that the administration understands the governors budgetary concerns. She also emphasized the administration’s understanding that states already has substantial discretion to alter benefits and establish or increase co-payments.

She went on to instruct governors on how to save money by selectively and judiciously reducing benefits, curbing overuse of costly prescription drugs and attacking fraud all at the states’ expense.

She refused to say whether President Obama would allow states to adopt stricter eligibility standards. President Obama understands that changing the eligibility requirements would, in effect, throw low-income people off the Medicaid rolls. It would destroy his objective of “universal coverage.” The states have realized that his objective of “universal coverage” was going to be at the states’ budgetary expense.

“The states are hamstrung by federal prohibitions against lowering Medicaid eligibility, governors from both parties are exercising their remaining options in proposing bone-deep cuts to the program during the fourth consecutive year of brutal economic conditions.”

“Please know that I understand fully the impacts of this rollback, and it is with a heavy heart that I make this request,”. Arizona governor Jane Brewer wrote this week in seeking a waiver, the first of its kind, from Kathleen Sebelius, the secretary of health and human services. “However, I am left with no other viable alternative.”

Gov. Nathan Deal, the new Republican leader of Georgia, proposed this month to end Medicaid coverage of dental, vision and podiatry treatments for adults.

A number of states, Texas and California among them, are considering further reductions of as much as 10 percent in payments to providers. Medicaid reimbursement is already so low that many physicians refuse to accept the coverage.

South Carolina is considering going a step further by also eliminating hospice care.

Rick Scott in Florida is proposing a 5 billion dollar budget cut for Medicaid.

Even with increase in federal payments for Medicaid aid to states from President Obama’s economic stimulus package, state budget deficits from Medicaid were so great that 39 states cut Medicaid payments to providers in 2010 according to the Kaiser Family Foundation. The economic stimulus package subsidy was unsuccessful and is scheduled to disappear in July 2011.

MITCH DANIELS ,governor of Indiana wrote a brilliant op-ed piece in the Wall Street Journal on February 3.

“Unless you’re in favor of a fully nationalized health-care system, the president’s health-care reform law is a massive mistake.

It will amplify all the big drivers of overconsumption and excessive pricing: "Why not, it’s free?" reimbursement; "The more I do, the more I get" provider payment; and all the defensive medicine the trial bar’s ingenuity can generate.”

His article represents the position of twenty-one governors representing more than 115 million Americans. They have written to Kathleen Sebelius asking for more flexibility on health-care reform.

President Obama’s healthcare reform act has provided Kathleen Sebelius massive power without the need for congressional consent.

“All the claims President Obama made for his healthcare reform act were false. It will add trillions to the federal deficit. It will lead to a de facto government takeover of health care faster than most people realize.”

“As millions of Americans are added to the Medicaid rolls and millions more employees (including, watch for this, workers of bankrupt state governments) are dumped into the new exchanges many trillions of dollars will be added to the federal deficit.”

The traditional media has not articulated this impending disaster. It will get worse. Governor Daniels has expressed his concerns gently. He also hit the nail on its head for the states.

“The law expects to conscript the states as its agents in its takeover of health care. It assumes that we will set up and operate its new insurance "exchanges" for it.

“The federal government want us to use our current welfare apparatuses to do the numbingly complex work of figuring out who is eligible for its subsidies, how much each person or family is eligible for and re-determining this eligibility regularly, and more.”

“Then, we are supposed to oversee all the insurance plans in the exchanges for compliance with Washington’s dictates about terms and prices.”

States do not have the infrastructure to accomplish most of this. The federal government does not have the apparatus to accomplish this. The point was proven recently by the federal fiasco when the states refused to participate in setting up high-risk pools.

“ As widely reported, it went poorly, with costs far above predictions and only a tiny fraction of the expected population signing up.”

“If the feds can’t manage this little project, what should we expect if they attempt it on a scale hundreds of times larger and more complex?”

Either we have a bunch of rookies in the White House who do not know what they are doing, or we have a bunch of geniuses who have choreographed the destruction of the healthcare care system in such a way that America will have no choice but to permit President Obama to install a completely socialized medicine system with the inefficiency inherent in government run bureaucracies.