Possible Medicaid Expansion Worries Gov. Rendell

The expansion of Medicaid, under the health care overhaul plan, has governors worried about added financial burdens in their states. Pennsylvania Gov. Ed Rendell, a Democrat, says the economic crisis' effect on states has made them extremely sensitive to an unfunded mandate for Medicaid.

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MELISSA BLOCK, host:

The expansion of Medicaid, under the health care overhaul plans have governors worried about an added financial burden in their states. And yesterday, the so-called Gang of Six Senators held a conference call with some governors to try to allay their fears.

Medicaid provides health care for the poorest Americans. Its costs are paid for by both federal and state governments. And it's expected that Medicaid rolls would increase by about 11 million people under the health care plans being proposed. Democratic Governor Ed Rendell of Pennsylvania is among those who have expressed concern about an unfunded mandate. He joins us from the governor's office in Harrisburg. Welcome to the program.

Governor ED RENDELL (Democratic, Pennsylvania): Thank you, Melissa. And you, of course, understand states all over the country are financially battered right now. So, all of us are extremely sensitive about the health care bill. And we - most all of us support the idea of health care reform. We're very sensitive to adding an unfunded mandate to our budgets because we simply couldn't deal with it.

BLOCK: Well, how many more Pennsylvanians do you figure you might have on Medicaid under this plan that's emerging from the Senate?

Gov. RENDELL: Well, to increase from a 100 to 133 percent would probably add another 40-50,000, maybe actually 60 or 70,000. Plus, once the mandate comes in in 2014, a lot of people who are not enrolled, from zero to 100 would enroll, it's what's call the woodwork effect. So, this would be a 100, 150, maybe as many as 175 to 200,000 additional people coming into the state Medicaid program.

BLOCK: When you say moving from a 100 to 133 percent, you're talking about people who earn - will earn below 133 percent of the federal poverty level would be eligible for Medicaid

Gov. RENDELL: Right. Right now, states are having their Medicaid program, people at various levels of the federal poverty standard. Pennsylvania and many states have it at 100 percent. The Medicaid bill that's coming out of Senate Finance raises it after two years to a 133 percent. And Medicaid, I don't know if all your listeners know that the costs are shared by both the federal government and the states. But to add a whole new group of eligibles and have the state pick up its normal cost is prohibitive.

Now, that's not what the Senate bill does. The Senate bill cushions this and the states don't pay the normal share they pay, but they would pay as much as 10 or 15 percent in the third and fourth years and maybe down the road, even more than that. And that's a difficult burden.

Now the Gang of Six told us last night that there were things in the bill that would be offsets, like for example, allowing us to seek a higher rebate from the drug companies for drugs under the Medicaid program. And they say that for most states, it actually comes out on the plus side. We're not totally convinced because we've heard that before. We want to see the bill and run the numbers.

BLOCK: Governor Rendell, Senator Baucus has said that the Medicaid costs are not going to cost states near as much as feared. He also talks though about shared responsibility. What do you take that shared responsibility to mean?

Gov. RENDELL: Well - see, it's a mixed message. On the one hand, they say most of us are actually going to come out on the good side. We're actually going to spend less money, state money than we're spending now. But on the other side, we're talking about shared responsibility. So you can understand why governors are nervous. And, again, we believe in the concept. But look at the House bill. The House bill that came out - the bill of Nancy Pelosi's (unintelligible), the federal government picks up all the expanded Medicaid cost, 100 percent. And obviously that's more certain and we're more comfortable with that.

But, look, we would absolutely do our share if we have the ability to raise the revenues that are necessary to do that. But right now, we don't. And this is not a time that most states can raise taxes because the economies are so bad. And there's real worry as you go down the line.

BLOCK: Well, Governor Rendell, thanks very much.

Gov. RENDELL: Take care.

BLOCK: That's Democrat Ed Rendell, the governor of Pennsylvania.

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