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FAA Air Transportation Modernization and Safety Improvement Act

Floor Speech

Location: Washington, DC

FAA Air Transportation Modernization and Safety Improvement Act


Mr. KYL. Madam President, I wish to commend my colleague from Texas, a former Texas Supreme Court justice, for analyzing the legal issues, as he has just done. It is yet another indication of why it is time for us to start over. I join him in urging repeal and replacement of this health care bill.

I would like to speak briefly about yet another reason why this needs to be done, and it is a very specific example. It concerns my home State of Arizona. There are other States that are in the same position, but I can speak to the specifics with respect to my own State. It has to do with just one of the many burdensome new mandates.

In this bill, as we know, there are mandates on individuals to purchase insurance, for example, as my colleague was just saying. There are mandates on families and companies and mandates on States as well. I wish to talk about the mandate on States, with respect to the Medicaid provisions of the bill, which is called the maintenance of effort mandate or MOE mandate.

Let me describe what that is. The maintenance of effort requirement forces an unfunded Medicaid mandate on States by denying them the full ability to manage their Medicaid Programs to fit their own budgets and their own unique Medicaid populations.

This is a huge problem because Arizona, along with most other States, is experiencing a dire budget crisis. Our State has lost over 300,000 jobs in the last few years, and revenue collections are down by 34 percent since the start of the recession. In the 2010 fiscal year, Arizona collected about $3 billion less in gross revenues than it did just 3 years prior in 2007.

During this same period, enrollment in Arizona's Medicaid Program has increased by 44 percent. Think of that. More than 1.3 million Arizonans are now covered by Medicaid. That is more than 20 percent of the entire population of our State.

Ordinarily, the State would be able to dial back that coverage in order to fit within its budget. But believe it or not, the ObamaCare law that was passed prevents a State from managing its own Medicaid Program by determining who is going to be covered by that program.

Right now, the Arizona Medicaid Program consumes almost 30 percent of the State's general fund spending. That is an increase of 17 percent over 4 years ago. So Arizona could, as I said, dial this back, except for one thing; that is, ObamaCare.

As our Governor, Jan Brewer, noted in a recent letter to Speaker Boehner:

The growth in Arizona Medicaid spending is a key cause of our state budget crisis and is unsustainable. ..... We cannot afford this increase without gutting every other state priority such as education and public safety.

So the Arizona legislature has taken steps to address this. They have now cut $2.2 billion in spending from a $10 billion budget, but that does not go far enough to address the rest of their budget problems. Despite these cuts, the budget shortfall is projected to be $1.2 billion in the next fiscal year.

So let me describe how this maintenance of effort requirement or mandate affects Arizona's budget. In 2009, the Federal Government imposed a mandate on States by which States could not change their Medicaid eligibility standards or methodologies and procedures in place on July 1, 2008.

This sounds identical to the maintenance of effort requirement in ObamaCare, but there is one crucial difference: The Federal Government's maintenance of effort stimulus requirement--the requirement I am talking about that was in the stimulus bill--was funded by the Federal Government. So the State was not adversely affected from a budget standpoint. Under the stimulus, the States received an enhanced Federal share of their Medicaid costs. But under ObamaCare, the maintenance of effort requirement is still there, except that the States have to pick it up. They are stuck with an unfunded mandate.

So even though States such as Arizona cannot afford their current Medicaid obligations, ObamaCare has forced an extension of the maintenance of effort requirement until 2014 but without providing any assistance to pay the exorbitant costs. In June of 2011, when stimulus funds expire, Arizona's share of its Medicaid Program will increase by an astounding $700 million.

The annual cost of the mandate is almost $1 billion, which is simply unaffordable. This problem is especially acute for Arizona and a handful of other States because we actually expanded Medicaid eligibility for childless adults beyond Federal requirements. So Arizona, in an effort to cover more people, by law, included additional people in the Medicaid coverage--adults without children. Rather than allow States such as Arizona to cut back to the level of other States--for example, to forgo that coverage at least for now--the health care law, ObamaCare, freezes in all of the existing disparities. So there are big differences between or among the States, depending upon how liberal, in effect, their coverage is.

We have tried to do our best to find ways to ameliorate the problem. We have devoted more resources toward Medicaid fraud prevention. There have been some very difficult decisions made, for example, including reimbursing health care providers with less money. As my colleagues can imagine, that hasn't gone over well. Even more controversial and very sad: Arizona has stopped Medicaid funding for several kinds of transplant surgeries effective October 1. This is actually a kind of rationing that is required by ObamaCare. The State cannot afford to provide the most expensive procedures and, therefore, it has to cut them back, all because they are prevented by law from dialing back the coverage of these adults without children. So the one place where they can cut is transplants--a very sad day, as I said. There is nothing good to say about it. Nobody is pleased with the outcome, but there is no other option.

But even that option obviously doesn't save enough money to forestall this budget crisis. Many of those who have been critics of the decision with respect to transplants have failed to tell the whole story which is that the Governor had to make that difficult decision because the health care reform bill eliminated a key option that she otherwise would have had to dial back the coverage to the level of other States.

Before enactment of the President's health care bill, the Federal Government and States were partners in health care delivery. Now States are merely a financing mechanism for the Federal Government's demands. What States need is permanent reduced Medicaid demand by way of authority to reduce eligibility standards for their Medicaid programs. As I am suggesting, all Arizona wants the authority to do is dial it back to where other States are.

Governor Brewer recently made a formal request to HHS Secretary Sebelius for a waiver from the maintenance-of-effort provision. Since the administration has granted over 700 waivers to companies and labor unions, one can only hope that the same fairness will be provided to States that are much more crucial partners to the Federal Government in the delivery of health care. Under the terms of the waiver request, Arizona would preserve Medicaid coverage for 1 million Arizonans who represent the core of Medicaid's mission--the aged, disabled, the blind, pregnant women, and children.

I support the Governor's request and I urge the administration to grant the waiver. But ultimately, only repeal of this law will provide permanent relief to all of the States such as Arizona and all of the other States similarly situated. So I am strongly in support of the amendment that provides for repeal and replacement with something that will work and will not punish our families, our residents, and our States.


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