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Dear Senator Coburn,

On behalf of the 362,000 members of the National Taxpayers Union, I write in support of S.1031, the Medicaid Improvement and State Empowerment Act.  This bill combines several key reforms of the Medicaid system that will save the federal government billions while allowing states the flexibility to provide improved and more efficient health care services to the neediest Americans.

Decades of explosive growth in both the size and cost of Medicaid are placing an enormous strain on government budgets. Federal spending on the program has doubled in the last ten years and the Congressional Budget Office projects that price tag will grow to more than $4 trillion over the next decade. This cost explosion is also impacting states, where Medicaid accounts for an average of nearly 25 percent of their budgets. Sadly, this unsustainable spending growth has not translated into positive outcomes for Medicaid patients. Low reimbursement rates have given cause for 40 percent of physicians to refuse or restrict access to patients in the program.

Rather than address these maladies, Medicaid’s fiscal situation was inarguably made worse by the Patient Protection and Affordable Care Act. Not only did that bill dramatically expand Medicaid enrollment, but it also enacted new maintenance-of-effort requirements that restricted states’ options to alter eligibility. These changes left states stuck holding the tab and consigned many patients to inadequate care.

One of the main drivers of Medicaid’s problems is its reliance on the flawed Federal Medical Assistance Percentages, which determine the rate that the federal government will match state spending on Medicaid patients. S. 1031 would replace this untenable system, which encourages bloated spending and top-down mandates, with a pass-through block grant model for certain Medicaid eligible population segments. This would allow states to receive a lump sum grant that would rise over time to reflect inflation and population growth. Freed (at least partially) from the long arm of Washington’s bureaucracy, states will be able to more effectively budget, as well as be empowered to improve patient outcomes. Your bill would also alleviate a great deal of budgetary pressure by unshackling the states from the costly mandates contained in the stimulus and health care reform laws. Finally, to stem the rise of medical costs and ensure as much money as possible is spent on patients, and not lawyers, S. 1031 would create a program to incentivize states to enact malpractice reforms.

The Medicaid Improvement and State Empowerment Act is an important step toward the goal of fixing our broken entitlement system. NTU urges your colleagues to cosponsor S. 1031, and any roll call votes on this legislation will be significantly weighted in our annual Rating of Congress.

Sincerely,