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Weekly Column: ObamaCare Mandate Starting to Kill State Budgets


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The ObamaCare law suffered a significant blow recently when a federal judge ruled that it was unconstitutional. The case was brought by 26 states, which challenged the constitutionality of the individual mandate provision of the law--the provision requiring individuals to buy health insurance.

But states also have another gripe with the law, namely the burdensome Medicaid mandates that it forces on states. One of those mandates is known as the maintenance of effort requirement, which prohibits states from reducing their Medicaid eligibility standards. It denies states the full ability to manage their Medicaid programs to fit their own budgets and their own unique Medicaid populations.

This mandate is a problem in Arizona and other states that are struggling to pay their bills. In Arizona, tax collections are down by 34 percent since the start of the recession, but enrollment in the state's Medicaid program has increased by 44 percent. More than 1.3 million Arizonans--20 percent of the population--are now covered by Medicaid. The state's Medicaid program consumes almost 30 percent of the state's general fund spending

State lawmakers have already taken steps to address the budget deficit by cutting $2.2 billion from a $10 billion budget, but the budget shortfall is still projected to be $1.2 billion in the next fiscal year.

So, even though states can't afford their current Medicaid obligations, ObamaCare forced an extension of existing eligibility standards until 2014. Arizona is especially affected because it has some of the most generous Medicaid eligibility standards in the country. Rather than allow states like Arizona to cut back to the level of other states, ObamaCare freezes in existing disparities. Beginning in June 2011, Arizona's share of its Medicaid program will increase by $700 million. The annual cost of this mandate is almost $1 billion.

What can Arizona do? The choices aren't pleasant. Arizona stopped Medicaid funding for seven kinds of transplant surgeries on October 1. That is rationing, and it's an unfortunate and tragic reality of any government health-care system and a direct and sad result of the ObamaCare mandate.

Before enactment of the president's health-care bill, the federal government and states were partners in the health-care delivery system. Now, states are merely a financing mechanism for the federal government's demands. States need to be able to reduce eligibility standards for their Medicaid programs and, thus, decrease the strain on those programs.

Governor Brewer recently asked Health and Human Services Secretary Kathleen Sebelius to waive the maintenance of effort provision. Since the administration has granted over 700 waivers to companies and labor unions, one can only hope the same treatment will be provided to states, which 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 one million Arizonans who represent the core of Medicaid's mission--the aged, disabled, blind, pregnant women, and children. I support the governor's request and hope the administration will grant this waiver.

The fact that Arizona needs a waiver from this provision in order to balance its budget should provide yet more confirmation that ObamaCare is deeply flawed and unworkable. Even with a waiver, only repeal of the ObamaCare law will provide permanent relief to states like Arizona and others that are similarly coping with high Medicaid costs. The Senate recently considered a measure to repeal that law, but unfortunately that effort was defeated.

My like-minded colleagues will continue to look for ways to undo the law and replace it with reforms that expand access to care, lower costs, and do not burden states with huge unfunded mandates.

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