Senator Barrasso, you have also served in a state legislature and you understand that — unlike Washington — states must balance their budgets every year.
I want to talk about our initiative to roll back the Medicaid Maintenance of Effort — or M-O-E — requirements that are threatening both Medicaid beneficiaries and the financial health of many states across the country.
If you will bear with me, I think that it is important to go through a little of the history on this subject. When Medicaid was first established as a limited, state-federal partnership, less than five million Americans used this program. Today nearly one in four are enrolled in this government program.
Medicaid spending now absorbs nearly a quarter of state government budgets, often forcing severe cuts to other critical state programs.
Unfortunately, this situation is getting even worse with the Medicaid mandates first imposed in the stimulus bill and then again in the partisan health law.
As a result of these Washington mandates, states are being forced to make drastic cuts to important priorities like education and law enforcement
States –— unlike Washington — which too often just prints money to pay for out-of-control spending, actually have to make tough budget decisions every year. And the states are facing the worst budget crisis since the Great Depression with a collective $175 billion shortfall.
Washington’s micromanagement of state Medicaid programs makes it incredibly difficult for the states to balance their budgets and provide for those who are most in need.
Because of the overly generous benefit programs that Washington forces on the states, they are unable to target health services to those most in need of assistance. Governors are unable to undertake common-sense reforms that root out program waste, fraud, and abuse.
The result of these M-O-E requirements is nothing short of Washington induced state fiscal crises.
In my home state of Utah, where the projected fiscal year 2012 budget shortfall is approximately $390 million, my state has said, “The M-O-E requirements imposed by the federal government…will cost the State $3.2 million annually.”
This might not sound like a lot to people in Washington who don’t bat an eye at trillion dollar deficits. But in Utah, $3.2 million is a lot of money in the state budget.
My close friend Utah Governor Gary Herbert has said, “[n]ot a state in this nation is immune to tough budget decisions, and sometimes Washington makes it even harder. Utah must seriously weigh the real costs of Medicaid, one of the largest and most expensive programs we have…Unfortunately, federal mandates tie our hands. Utah has zero flexibility to respond to economic conditions, or the option to scale the program back in a way that reflects local values and priorities.”
Governor Herbert — and many other governors across the nation — have repeatedly asked Washington to repeal these onerous Medicaid mandates. And we have just introduced legislation, the State Flexibility Act, to do exactly what the governors have asked.
The State Flexibility Act fully repeals these burdensome Medicaid M-O-E regulations. It starts to put states back in control to balance their budgets, while simultaneously lowering federal entitlement spending.
Our legislation will save American taxpayers $2.8 billion over just the first five years.
Regardless of political affiliation, I am confident that this bill has the potential to garner strong, bipartisan support in Congress and represents a strong first step toward achieving comprehensive Medicaid reform. Any senator who has talked to their state’s governor knows that we need to pass this legislation to enable states to survive the current fiscal crisis and to better care for the most vulnerable Medicaid beneficiaries in their state.
It is time for Congress to roll back these unreasonable M-O-E mandates and put the states, not Washington, back in charge.
I would like to thank my colleague from Wyoming, Senator Barrasso, again for working with us on this legislation. He brings a unique perspective to this debate over M-O-E requirements, and he is serving his state well.
I would appreciate hearing more of my colleague’s thoughts on this matter.