I had been working on a piece that I was going to submit to the News Journal. Given the voters of  Massachusetts delivered a much more concise explanation as to why the Healthcare Bills being considered in Congress were a bad idea, I am just going to post my thoughts below. Suffice it to say, our Senate delegation and Governor were ready to throw Delaware taxpayers over the side to get a bad bill through. They should all thank Massachusetts…

My view, slightly edited to adjust for the past tense:

Until this morning, the United State Congress was likely going to vote on a 2300 plus page bill that would have radically altered the country’s health insurance and payment system. The leadership of Congress as well as the President had stated repeatedly that this bill would not increase the cost to the average taxpayer and actually would reduce the cost of the healthcare system. This is demonstrably not true, and I am concerned that our US Senate delegation and our Governor have been supporting a bill that would have created an on-going State budget crisis, cuts in other services, and/or higher taxes in Delaware while not achieving the goal of universal access to quality healthcare.

As some background in 2007 I introduced a report on Medicaid options for Delaware and sponsored legislation that would have mandated a review of Delaware’s Medicaid program. The State Senate leadership refused to hear the bill. At that time, Medicaid in Delaware was the fastest growing part of government growing around 14% per year. The nearly $1 billion in annual spending on Medicaid made it the second largest State government expenditure second only to public education. Given its rate of growth, by 2014, Medicaid could be the State’s largest expenditure. Should the US Senate bill pass Congress, Medicaid will almost certainly be the State’s largest expenditure – requiring cuts in other programs and/or increased local taxes.

I make the previous statement because under the giant House and Senate health bills, Congress was counting on expanding Medicaid enrollment by 15–20 million people. Recent reports from the National Association of State Budget Officers (NASBO) show that Delaware is in no position to accept any increased costs to expand Medicaid. In the current year, Delaware will spend approximately $500 million on Medicaid with a federal match of approximately $630 million. This Federal match is scheduled to be reduced by about $40 million for the next budget year and by as much as $90 million the year after that.

As the Federal Government reduces the monetary support of Medicaid, the Senate Healthcare bill required that the Delaware Medicaid population increase by approximately 21% from 129,000 people to almost 156,000 people, according to the Heritage Foundation. If funding per covered citizen is held constant, then Delaware would have to increase the Delaware portion Medicaid spending by over $100 million. If the Federal government does not maintain the current 50% match, Delaware’s share could have increased by as much as $200 million for these additional enrollees.

While the US Senate bill would have forced over $100 million of new spending onto Delaware taxpayers at least this additional spending would have paid for Delaware residents. The Senate healthcare bill was laden with extra benefits for other States, to be paid for by Delawareans. Our Senate delegation and Governor remained silent on the egregious deals cut by Senator Ben Nelson of Nebraska and others. Senator Nelson ensured that the Federal government will pay for all Medicaid spending increases in Nebraska, forever. Who would pay for this deal? Delawareans would. Add to the Nebraska buy-out the $300 million deal cut by Sen. Landrieu of Louisiana (the so-called “Louisiana Purchase”) as well as individual benefits to Nevada and other States, and Delawareans would pay much, much more for entitlements to other States.

In short, the pending health insurance/payment reform legislation in Congress was a classic “bait-and-switch” bill. The Bill claimed to reduce spending and increase coverage while actually passing those cost increases down to the States through Medicaid. A handful of Senators sold their votes to get protection for their States Medicaid systems. This cost shifting would have forced Delaware to do one or more of the following: increase annual spending by well over $100 million per year, reduce services in other areas of government, or require reductions in Medicaid coverage for the existing 129,000 recipients. The Bill was a bad bill for Delaware. Shame that our Senators and Governor remained silent while we were being set up.