The White House
Health Care Reform Today
November 22, 1993
- The Chairman of the President's National
Economic Council confirmed a study by the Center on
Budget and Policy Priorities that shows deficit
reduction legislation proposed by Reps. Penny
and Kasich includes an unfunded mandate that would cost
the state budgets $5.1 billion over the next five years.
- Robert Rubin, Chairman of the NEC, said the
study is accurate it points out clearly that under
Penny-Kasich, states would be forced to pick up
additional Medicare costs. The study says: "The
largest Medicare savings provision in the
Penny-Kasich plan requires Medicare beneficiaries to pay
20 percent of the cost of home health services. The
provision is designed so that beneficiaries under 150
percent of the poverty line will not have to pay this
new charge. The mechanism the Penny-Kasich plan uses to
achieve the result imposes a new $5 billion unfunded
mandate on the states."
- Rubin confirmed the report language that says:
"The impact of this new mandate on state budgets would
be especially troublesome since states would have little
opportunity to control its costs. States have no
authority to set or restrain Medicare home health care
charges. Nor do they have any authority to take
action affecting utilization of Medicare home health
services. This is a serious concern for states because
Medicare home health costs have been rising rapidly.
>From 1988 to 1991, Medicare expenditures for home health
services rose 69%.
- The costs to state treasuries would be extremely
large -- $5.1 billion over five years. Moreover, this
cost would grow rapidly. The CBO figure show that the
cost of this unfunded mandates would jump from $550
million in fiscal year 1994 to $1.3 billion in fiscal
year 1998.
- State budgets have been increasingly squeezed in
recent years by rapidly rising Medicaid costs. State
Medicaid spending increased in 1992 by 27.9 percent over
the previous year's level.
- Fifteen states will incur costs of more than 100
million over the next five years as a result of this
mandate. Over half of all states will incur additional
costs of more than $50 million over the five-year
period. The costs of this mandate will climb steadily
over time, placing increasing pressure on state budgets.