by Governor Linda Lingle

With Congress poised to reconcile the Senate and House versions of national health care reform legislation, this is a critical time for the people of Hawaii to understand why neither bill is good for our state or nation.

To begin with, both versions of health care reform would impose massive unfunded mandates on state governments. Some of the costliest mandates for Hawaii are in Medicaid.

Because we fund Medicaid with both federal and matching state dollars, expanding eligibility and benefits would cost Hawaii taxpayers, conservatively, more than $300 million over five years.

In Hawaii, we have some of America’s most generous Medicaid programs – especially for children. Medicaid enrollment jumped by almost 15 percent in 2009, and last spring the State Department of Human Services had to delay $43.5 million in payments for medical care because of a serious budget shortfall.

Nearly one year later, we are still unable to catch up with our Medicaid funding deficit, and it is about to get worse – a lot worse. On January 1, 2011, the boost to states for Medicaid programs from the national stimulus funding will come to an abrupt end after nine quarters. That means Hawaii will stop receiving more than $350 million in federal funds.

It would take a tremendous sacrifice for Hawaii to maintain the generous eligibility standards and benefits low-income residents currently enjoy in our Medicaid programs. It would take an even greater sacrifice to pay for new federal unfunded mandates required in the Senate and House versions of national health care reform.

If Congress forces Hawaii to further increase Medicaid eligibility and benefits, we could only pay the bill by slashing other government programs or by raising taxes. Neither option is acceptable, in my opinion.

Here are some other significant problems with the Congressional health care bills:

• The Senate version financially penalizes Hawaii and other states that expanded Medicaid coverage prior to the current fiscal crisis, while rewarding states that only provide minimal assistance for their needy residents.

• Both bills would federalize most aspects of Medicaid, meaning states would lose the flexibility to control costs and health outcomes.

• In exchange for their “yes” votes on health care reform, certain politicians received grossly unfair and possibly unconstitutional “sweetheart deals” that would shift Medicaid costs to other states, including Hawaii.

• Neither bill contains meaningful provisions to lower health care costs through medical tort reform.

• Neither bill attempts to fix the inefficient practices and abuses that drive costs out of control in the hugely expensive Medicare and Medicaid entitlement programs.

• The Senate bill does nothing to address the unfair burden on Hawaii’s taxpayers – currently topping $120 million annually – created by the federal government’s Compacts of Free Association (COFA), which allow migrants from Micronesia, the Marshall Islands and Palau to live in Hawaii.

• The House bill makes COFA migrants eligible for Medicaid, which is funded by federal and state dollars, but that is only a half-measure. The U.S. government harmed the home countries of COFA migrants with nuclear weapons testing in the 1940s and 1950s, so it is undeniably a 100 percent federal responsibility to pay for health insurance and all other benefits COFA migrants receive in our state.

In addition, our Congressional delegation would have you believe they scored a legislative coup by bringing additional federal dollars into Hawaii through the Disproportionate Share Hospital (DSH) program. This money is intended to help hospitals defray the cost of treating uninsured or under-insured patients.

What our delegation does not mention, however, is that Hawaii can only receive those federal DSH funds if we put up additional matching state dollars, which are in very short supply as we attempt to overcome a budget deficit of well over $1 billion.

These delegates do not like to mention that our Department of Human Services has already creatively obtained more than $100 million in federal funding to help hospitals provide charity care. And this federal funding does not require a single dollar of additional matching state money.

We all know that America’s health care system has serious problems and that we must act swiftly to achieve fair, affordable and sensible solutions. Unfortunately, the Senate and House bills would take major steps in the wrong direction.

Time is short, but there is still an opportunity to do the right thing. We must “reform the reform bills” during the reconciliation process. Better yet, there is still time to include many alternative proposals offered by minority members of Congress, who have been shunned by the majority and unfairly stereotyped as obstructionists.

Focusing on targeted strategies to fix what is truly broken in the health care system is certainly preferable to forcing our nation’s people to surrender their common sense and independence to a hurried, fiscally unsustainable and seriously flawed political boondoggle.

I urge our residents to make their voices heard in Washington before it is too late.