Douglas leads opposition to congressional Medicaid plan

09/29/09 5:50PM By Bob Kinzel
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AP File Photo/Toby Talbot
(Host) Governor Jim Douglas is leading an effort to oppose a congressional plan that would require states to help pay for expanding the Medicaid program. 

Douglas says the plan is an unfunded mandate that will impose unfair financial burdens on many states.

VPRs Bob Kinzel reports.

(Kinzel) One of the key provisions of the health care reform debate in Congress is an individual mandate that basically requires everyone to have insurance coverage and people who fail to get coverage would face penalties and fines.

The bill offers subsidies to middle income families and it expands the eligibility rules for Medicaid to allow more people to have access to the program.

Governor Jim Douglas says the plan, as it's now written, is very unfair to individual states.

That's because Medicaid is a joint federal - state program. 60% of the costs are paid for by the federal government and 40 % by the state.

Douglas says that means that a sizeable increase in the number of people enrolled in Medicaid will have a direct and very adverse impact on state budgets.  That's why Douglas is calling on Congress to pick up all of the costs of expanding Medicaid: 

(Douglas) "It's easy to say we'll let the states pick up the tab but states are not in a position to do that. States have been making difficult budget choices - cutting back on education, on funding pension systems and in some cases borrowing more money to get through these difficult economic times. So we really can't absorb a mandate from Washington."

(Kinzel) Douglas says there's a second problem. States like Vermont, which have received tens of millions of dollars in federal health care stimulus funds, are prohibited from reducing their own Medicaid eligibility rules, as a way to cut state spending:

(Douglas) "So that's really a double whammy, if they decide to impose a mandate that's unfunded and put additional expenses on states and then deny us the flexibility to restructure our program in a way that will allow us to accommodate those costs. That's really unfair."

(Kinzel) Congressman Peter Welch says Douglas has a valid concern that must be addressed by Congress:

(Welch) "If we suddenly hammer the states with the responsibility to pay for health care reform that is in my view just irresponsible. So the governor is making a good point I know that's a bipartisan point among the governors and I strongly support doing all we can to make certain that whatever legislation we pass in Washington is paid for and not simply a bill we pass on to the states."

(Kinzel) Welch says the expense of expanding Medicaid has to be considered as part of the total cost of the health care reform bill.

For VPR News I'm Bob Kinzel in Montpelier.

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