MR.AKAKA. Mr. President, I support the floor amendment offered by my colleagues Senators Bingaman and Smith to strike the cuts from Medicaid and the State Children's Health Insurance Program (SCHIP) in the budget resolution.
The budget resolution includes $15.2 billion in reductions in mandatory programs that are part of Function 550, which is limited to health programs. Medicaid and SCHIP are the only mandatory programs in this category that are under the jurisdiction of the Senate Finance Committee.
The reductions in Medicaid included in the budget resolution will lead to further cuts in coverage and benefits for people in need. They will prevent individuals from being able to access health care, which will increase the burden on our public health system. In Hawaii, Medicaid and QUEST, Hawaii's program that provides health coverage through managed care plans for eligible lower income residents, provided essential health services to nearly 190,000 people in 2002. For those in rural Hawaii, particularly the elderly, Medicaid provides access to health care that they might otherwise have to go without. The Medicaid cuts will further erode the ability of hospitals, clinics, physicians, and other medical providers to meet the health care needs of our communities. These very same health care providers already are confronted with inadequate reimbursements, rising costs, and an increasing demand to provide care for the uninsured.
Mr. President, without doubt, the Medicaid reductions in the Senate budget plan would adversely affect health care coverage for low-income, uninsured Americans. Medicaid programs are demanding a larger share of state spending than they have in recent years. Reducing the Federal commitment to Medicaid will push additional costs to the states and increase the number of people who are uninsured or under-insured.
Mr. President, contributing to the obstacles in delivering quality health care to those who need it the most are the critical losses that a majority of states will see in their Federal Medical Assistance Percentage (FMAP). The FMAP formula is designed to pay a higher FMAP to states with lower per capita income relative to the national average. According to the Federal Funds Information for States in its report, FY 2006 FMAP Projections, 30 states are projected to experience cuts in their FMAP. This aggregate FMAP cut translates into an $850 million reduction in FY 2006 Medicaid grants to the impacted states. The five states facing the largest FMAP decreases include Alaska, Wyoming, New Mexico, North Dakota, and South Dakota.
Mr President, Hawaii faces a projected FMAP decline of 0.7 percent for FY 2006, which translates to a loss of $655,000 that could be used to provide health care to the citizens of my state. While it may seem like a small decline compared to larger, more prosperous states, let me assure you that the loss will be felt. In a June 2004 report by the Families USA organization, nearly one out of three people under the age of 65 went without health insurance for all or part of the two year period from 2002-2003 in Hawaii. More alarming is the statistic that nearly 82 percent of uninsured people in Hawaii are members of working families. The report went on to make the distinction that 61 percent of families in Hawaii, at or below 200 percent of the federal poverty level, were uninsured.
In 2005, it is estimated that the Hawaii Medicaid program will spend just over $929 million. Of this, the federal government will contribute nearly $544 million. A substantial portion of Hawaii's health care industry relies on Medicaid spending. In 2002, Medicaid payments infused Hawaii's hospital system with more than $106 million. In addition, Medicaid is the primary payer for 70 percent of Hawaii's certified nursing facility residents. Any cut in Medicaid funding will have a profound effect on the economic viability of Hawaii's health care system and its ability to care for people in need.
Medicaid costs for states have soared in recent years, driven by rising health-care costs, an aging population that relies largely on Medicaid to pay for nursing homes, and a recession that sent more people to state-supported health care. Medicaid reform needs to have a reform discussion that is not driven by an arbitrary budget number.
While I support improving the health care delivery system for all citizens of our country, the need for unique legislation to satisfy an essential, fundamental need is indicative of the flaws in the current Medicaid system and an issue that the Commission proposed by this amendment can address. Medicaid needs more funding, not less. Escalating costs, the increase in the number of uninsured, FMAP cuts, and the clawback provision in the 2003 Medicare drug benefit legislation only serve to put more pressure on state budgets. I urge my colleagues to support this amendment to restore dollars available to provide essential Medicaid coverage to our country's most vulnerable citizens.
Thank you Mr. President.
