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STATEMENT OF CONGRESSMAN JOHN D. DINGELL
RANKING MEMBER
COMMITTEE ON ENERGY AND COMMERCE


SUBCOMMITTEE ON HEALTH HEARING ON "INTER-GOVERNMENTAL 
TRANSFERS: VIOLATIONS OF THE FEDERAL-STATE 
MEDICAID PARTNERSHIP OR LEGITIMATE STATE BUDGET TOOL?"

April 1, 2004

The Medicaid program is currently struggling -- especially in these difficult economic times -- to serve its vital role as a healthcare safety net for millions of children, individuals with disabilities, pregnant women, and low-income elderly and parents who have lost their health insurance coverage. Any cut in federal Medicaid dollars at this time will in all likelihood cause states to reduce eligibility and cut benefits to those in America who are the most vulnerable in times of crisis.

With that in mind, the Administration wants to cut $23.5 billion over 10 years, claiming that the Medicaid program is rife with fraud, waste, and abuse. I have long fought against fraud, waste, and abuse in this program, such as Medicaid money being funneled into roads, bridges, or stadiums, or Medicaid money being recycled merely to draw down more federal dollars. But I also have fought against efforts to cut coverage and benefits from this truly vulnerable population, such as this Administration's block grant proposal.

There is no argument about the fact that there was abuse in the past. Let's look at the history of this. States abused the provider donation and tax structure. Congress put an end to that in the early nineties. States abused upper payment limits using intergovernmental transfers. Congress enacted legislation in 2000 that severely limited the pot of money available to states within each upper payment limit. Abuses in disproportionate share payments were addressed in 1993 and in 1997.

If the Centers for Medicare and Medicaid Services (CMS) provides us with concrete evidence, and not just anecdotes, that there is systematic or significant abuse of Medicaid dollars, I will be ready to act again. Continuing, however, to cite abuses that have already been addressed under the law is curious at best, and deceptive at worst. Nor is the answer to use such anecdotes to restructure or block grant the program.

Moreover, I am already somewhat suspicious of the CMS proposal because although they proposed a definitive amount to cut, it has been two months since the budget was released, and we still have no details. And, I am not sure we are going to get any today. I am particularly interested in learning how much of a cut is anticipated -- not globally, but on a state-by-state basis and how that will affect children, individuals with disabilities, pregnant women, and low-income elderly and parents in those states.

Finally, efforts to make reforms, if needed, must be done thoughtfully, particularly during a time when states are still struggling to come out of the recession and facing upwards of $40 billion in budget deficits for the coming year. If Congress cuts the Medicaid program, and it fails to help states this year by extending the federal fiscal relief passed last year, millions of Americans could lose their health insurance coverage.

But instead of helping, the President is mounting an assault on the program that provides insurance coverage to more than 50 million Americans. Already under his tenure, we have seen the number of uninsured rise by 3.7 million people. When we have a nation of 43 million uninsured who are dependent on public facilities, such as the University of Michigan Medical Center or the Forest Medical Center in Ypsilanti, Michigan, why is the Administration attempting to undermine funding for the very facilities that serve the uninsured? These policies will hurt working families and the uninsured at both ends -- the program and the providers.

I look forward to the testimony we will hear today. I hope we hear that we must take care to do no harm to this important healthcare safety net that serves millions of Americans every day. We should certainly take care not to add more burden to the ranks of those who are uninsured, especially in these tough economic times.

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(Contact: Jodi Seth, 202-225-3641)


Prepared by the Committee on Energy and Commerce
2125 Rayburn House Office Building, Washington, DC 20515