250-dollar rebates for the medicare drug crisis as a relief, and again, in utah, the affordable care act now has 270,000 medicare recipients to receive free preventive care. and in utah again, i know note the uncompensated care and health care providers will be protected against over a billion dollars in the next decade and also in utah the affordable care at over 200,000 otherwise uninsured state residents would be able to afford affordable health coverage. now gentlemen, we have all of this before us and i am trying

to understand, if i could start with you, governor herbert, i don't have much time left. what are we going to do to replace these benefits if we repeal them? how are we going to make the categories i just mentioned the would be significantly benefited? >> i think as governor barbara mentioned we care about our people and our states and will find solutions. >> that's not the issue, i don't want to get into that. >> it seems like from washington its do it our way or it won't get done. now utah has good health care and has had good health care. i just come from the position that as we look to those who need the benefits and we find with those benefits are nobody can define them better than the governors and the people in the states. so the eligibility, the benefits, they ought to be received we can help define that

better than anybody i think, certainly -- >> i apologize i've got 15 seconds between the two colleagues to read >> chairman dingell, think you. most of the businesses won't qualify for those subsidies. her lover, the standard benefits package that we expect to be put on us will cause many of our small businesses that today struggle to provide health insurance for their employees will drop that health insurance because the standard benefits package is going to drive the cost so high. as far as the pre-existing condition, we recognize this long before governor barbour was governor. we had a risk pool for people with preexisting conditions, about 3600 people in it right now and that is about average as you could imagine. people move into it and then when they are pre-existing exclusion expires the move out. the federal risk was 58 people.

even though the cost is less and the premium is lower, so this is just an example of something that i don't know i've told 35 states have a risk pool like us or similar risk pool. there are things we do, can do, and we are doing them and we think we should be about to make those decisions instead of having the high mandatory benefits package increase the cost of insurance in our state. that's my concern. >> governor patrick? >> we see a tremendous amount of flexibility in the affordable care act today. we see some further benefits in terms of federal tax credits for the next tier of people we are trying to reach. we see the tools to help us get at the tool eligible which is a number have mentioned and i know my colleagues agree particularly

expensive part of the health care system and we see some flexibility to try new things in terms of payment delivery systems and payment reform which is where the real pickup is and not just the medicaid but the health care cost generally. this is a good bill and one worth fighting for. >> mr. chairman, thank you. >> the gentleman from illinois, mr. shimkus five minutes. >> thank you, mr. chairman. i want to submit the state of illinois, i don't want to go through it and want to submit that for the record. thank you, governors, for coming. utah and mississippi both run about 700 million-dollar deficit right now where i'm being told that massachusetts has a billion dollar deficit you'll have a balanced budget amendments. illinois is $13 billion in the whole. do you believe that the

obamacare gives you the flexibility to address changes and medicaid give such a larger budget deficit under control? >> shortly, yes, sir. >> in utah our structural balance we have the deficit, the structural imbalance. we are not borrowing it's about $200 million, but this clearly, the cost to us as we move forward with the affordable care act will throw that out the window. >> it doesn't give the flexibility to meet your budgetary needs? >> it doesn't give us the flexibility. i guess the definition how flexible is flexibility? you know, there are some flexibility senate but again, if we have to maintain the maintenance of effort, if we have to in fact use the -- >> i don't want to be disrespectful, but i want to get -- of your patrick -- >> yes. spinet you think it does give flexible the? governor barbour? >> the difference is i don't have his state health care system under hours.

it would drive up my cost, it would absolutely need a three large tax increase necessarily, but more importantly it will drive up the cost for health insurance for the individuals and businesses that buy health insurance. >> thank you. in illinois $15 billion of debt, that is our financial position in the state of illinois. if the members of the congressional delegation would write you a letter saying we know you've got issues, can you get with your health and services people and let's start talking about how we can jointly help solve this problem. would you as the devotee willing to address your concern? governor herbert? >> desolate. >> governor patrick? >> i'm not sure why it is and the question that we've been working closely. >> this is medicaid, we have a large role in the medicaid delivery system. we want to help you would you say yes, come on?

>> is, i think to her credit, christine whose share of the national governors, a democrat by the way, is trying to do just that and the fact you all are having governors here -- >> just for the record november 2000 - in a letter to our governor and have yet to get a response. one of his $13 billion in debt on medicaid. i want to address quickly the cost issues if we are going to help contain cost in the emergency room wall that anyone that walks in the door has to receive -- even if it's not in an urgent issue if we address this and are able to triage and push people to urgent care that would be a reform of the federal level the healthy control cost. >> i think it would. need some analysis by experts in the state but i think so. >> governor patrick? >> i think so.

>> i would urge you to give us permission for us to do something rather than tell us how to do it. >> what about obamacare, when you're talking of saving cost, $50 billion of savings if we would move on tort reform, lowering costs, $50 billion could have gone to take the expensive costs of promoting. what tort reform be a good way to halt on the cost? governor herbert? >> absolutely. >> and a patrick? >> in the bill i referred to earlier which is the next phase of health care reform we have concluded the tort reform, yes. >> my first year as a finer we passed the most comprehensive reform. it doesn't just cut the cost, it proves the quality care because we have doctors leaving to get away from the lawsuit abuse and so it is more than the cost. >> my next question on the federal law, we give the federal qualified health clinics, we give them protection. if we are providing health care medicaid dollars, federal

dollars, if we provide federal -- i mean, federal tort claims act for practitioners who are receiving federal dollars with the help drive down the cost? >> i don't know how to answer that. >> under our tort reform claims at the university hospital and all they have caps under the law. >> thank you very much. i yield back my time to speak in the chair will recognize the gentleman from new jersey, mr. mr. pallone. -- before mr. sherman. i want to go back to governor patrick because i know that in response to mr. waxman you are basically talking about how more quality care improving coverage and quality care actually lowers costs and i believe that if you cover more people you give quality care that ultimately save the system more money and at the risk of being critical of

the republicans i'm going to be any way. i just think it's ironic because if you go back a few years you have people like governor romney who were advocates for the universal coverage because it saved money in the long run. i remember when the second george bush was president he was a big advocate for expanding community health centers and now we see the republicans in cutting and even diaz that gave more money to the states to read the was a big thing with the republicans. >> back in 2003, long before the democrats were even doing it. now we see all of these -- now we see the opposite. we see republicans backtracking and say they don't support these efforts to expand coverage and provide the community health centers with funding. i just want to issue two things, governor patrick, one is if you want to expand a little on the benefit to have a chance on

congressman waxman ads about, you know, what massachusetts did to expand coverage and how that actually improves quality comics for cult figure people, and in the long run will worse cost. if you could maybe spend a minute or two on that. >> thank you for the question. the simple fact is more people in massachusetts today get their primary care in primary settings than in higher cost rooms and that system cost a smooth the debt. because in its principal of insurance that more people who are injured the more to spread the risk that also moderates cost premium cost which is the provider. although there is very stiff increased faster than inflation in massachusetts and everywhere else in the country. this has nothing to do with universal care. this has to do with the way that we in cent if i may use that as a verb, the way the incentives

for how we pay for health care. right now we pay for the number of times you are in and out of an office, the number of tests that are run and not the quality of the care and managing the care closely particularly for those high-cost chronically ill people have been shown to be better care for the individual but also lower-cost. what we have in the fertile cataract or tools we don't have enough verdone healthcare reform and we are building on now with the new piece of legislation i filed two weeks ago to realign the incentives and get the system might cost and that is good. not just for the state and local budgets, but that's good business budgets and for the working families. >> i appreciate that. and again, i didn't hear mr. barbour criticized mitt romney, but i know that he got thankfully for that, but i know that he gets a lot of criticism, and he was the one that basically came up with this idea

as a governor of the time in any case. i want to ask about the community health centers because this is another case. when i was here and george bush, the second george bush was president he pushed for community health centers and this is going to be our answer for people who didn't have coverage. now we see in the c.r. community centers are cut by 1.3 billion for the president's request and a little practical extension to the community health centers. in your state, massachusetts, you would lose 5 million in the community health center funds being used to provide care for nearly 90,000 of your residence. i had a community health center the was funded in the recovery act wrote me a letter saying now that they have to close the door at the c.r. becomes law. so, you know, how is your affair if the funds are cut off? >> the centers are we if we don't have medicaid or the medicaid gets cut back people at least can go there.

it's another backup. >> and stand the question and it is a worry for us. we have a broad network of health centers and frankly the community health centers like the community hospitals can tend to be lower cost settings of primary care than the wonderful down town teaching hospitals that we have come and for our system to work and i think for the universal systems to work, we have to have more communities dispersion where people get their primary care. so we very much for watching and involved in trying to assure just as we keep our end of the bargain for the community health centers that the congress does as well. >> thank you. >> mr. chairman, governor some think you for coming. governor barbour, you mentioned a couple of years ago you started a new program for the persons to individually signed up for allegedly.

i didn't hear after that first year requiring individuals to synnott personally what happened to your roles, what percentage was the effect of that? .. >> i understand. >> that you can. >> yes, sir. can you elaborate on the experiencalling with bureaucracy and the attempts to have

waivers? do you kind it helpful? timely? too burdensome? would you elaborate? >> my experience over seven years of being governor, there's a bunch of nice people that work there and they work hard. i went up to the headquarters to work through a complicated issue. for whatever season it is slow. and i am told that the average waiver takes a year. i have been through personally in the last 15 months a state plan amendment in contract that took 15 months and at the end of 15 months, it was approved expect they told us you can't do the part that actually helps. you know, they didn't approve that part of the contract. these are things that we shouldn't have to come up here and ask for. we ought to have the flexibility to run the program. i don't think it's because they are not good people, or they are

not working hard. the process is long and drawn out. >> thank you. herbert, you mention, would you elaborate on your dealings? >> i gave the example of wanting to go paperless. that's what we are about today. it's a voluntary basis. you don't have to do it. but it would save us $6.3 million. we were getting nowhere. i came to get things moving. we couldn't understand why we were getting the denial, sent my e-mail, we thought it was ironic. and that kind of got things moving. but it was really the conversation yesterday with president obama that allowed us to finally get the log jam removed and do something that's just sensible. but we have other waivers out there that we want to look at that would allow us to, in fact, put together a medicated rainy day fund to help us slow down the cost of rising medicaid to

start providing fee for service for payment for healthy outcomes. not just for procedures. to consent on the right side. that would require waivers. we'll come up with ideas, other states will come up with ideas, we need the ability to get dialogue and get the waiver about the efficiencies in the system. >> thank you. during the debate of the obamacare, they stated passing the bill would get people to stop using emergency room. in massachusetts where medicaid visit the er more or state police >> -- more or less? >> about the same. >> i have a study 2011 but douglas holtz-eakin they visited more than three times than those

with private insurance. do you think that figure is in the ballpark? >> that figure is not current. it's about the same. the total population has gone down. we started establishmenting health care at the beginning much 2007. we've had four years of getting at that and total utilization in the erf d -- er has gone down. >> half minute i'll yield to dr. cassidy. >> i'm sorry. if it's all right, do you mind if i also say something about our experience with ems? >> go ahead. >> i would just like to to to -u know, we've negotiated now two waivers with cms in order to do our own experiment. i want to say that our experience has also been a very deliberate, very sometimes feeling tedious experience with

the current administration and the administration before. now when we have raised the issues in the past, they have expressed what i think is the perennial concern which is that they know that they have also, as much as we want flexibility, they know that we have to be accountable. so there's been a lot. if there's a way to smooth that up, smooth that out, i think that's something that we'd love to work together. >> gentleman's time has expired. mr. markey. >> thank you. mr. patrick, mr. barbour said he accepted a deal that they receive 50% of the medicare money they receive today. he could live with that deal. >> i'll take 50%. >> what would be the impact in massachusetts if there was a 50% cut in the medicare funding that went to the state in terms of the impact on the health care of

our residents? >> well, i think that would jeopardize universal care. it's -- i mean that would be profound for us. now we are working very hard just to repeat myself, to get system costs down because the cost of care down because that's important not just for medicaid were but across the economy. and as we gain those savings, that's good for the federal government just as it's good for the small businesses that are in the private market. but no, that's not -- we're not looking for that. >> no, governor barbour if i may, i said we would take 50% of the increase. that we would cut our total fmap in half. just when the increase game, we'd take only half as much. i'm glad you said that. i hope the others didn't want to understand. >> half of the increase. didn't want to give up as much. >> i'm not that crazy.

>> mississippi is more than willing to accept that money. but the next question is governor barbour spoke about how he felt that the private sector would not insure as many of its employees under this kind of a system. what is the experience in massachusetts been? >> that phenomenon, i understand is called crowd out. and actually, i'll tell you what i was looking at this, i spent most of my life in the private sector. so when i was looking at this when it was being debated, it seemed to me a business could make a rational decision to stop offering health care for their employees and say, you know, you go on the publicly subsidize it. it's actually been the opposite result in massachusetts. there are more businesses offering employees health insurance today than before our health care reform went into affect. >> so it's actually gone up, not down in terms of the businesses

providing health insurance. >> correct. >> how what about your work with the insurance industry itself to contain costs? how has that proceeded since the bill has been implemented? >> well, say that our work with the insurers has proceeded on a parallel course, not necessarily because of afford care act. meaning we've been seening -- i mean small businesses, i suspect everybody here does who are seeing their commercial activity pick up and then they get that increase in their premium at 20/30, 50% in some cases. they can't see a way to add that one or two employees. that's important for us because 85% of the businesses in our commonwealth as you know, congressman, are small. if they don't start hiring, we don't get a recovery. it's as simple as that. we engage with the insurers about a year ago using existing

state authority to disapprove obsessive rate increases. and we did just that. and then we had a tussle. everybody eventually got to the table. and what we're 20 and 30 and 40% increases last year are single digit base rate increases this year. but that's a step. it's a temporary step. what we need more to the point that the comprehensive payment reform and delivery system reform, which is what we are moving on now. and what has accelerated, frankly, by provisions in the affordable care act. >> there's some that say it harms the economy, leads to higher unemployment, and hurts the bond rating of the state. what has been the experience in massachusetts? >> our budgets have been responsible, balanced, and on time the last four years. we are working with the legislature to assure that again this year. our bond rating started out strong, has remained strong

through the recession, and was just recently upgraded from a aa to aa positive. we're the only state since 2007 that's have an improved bond rating. we have continue to unvest in public education at the highest levels in the history of the commonwealth. i'll also say our unemployment rate is about a point and a half below the national unemployment rate. we are not satisfied. we still have to drive that down. but when i talk to those small businesses who are concerned about their premium increases, they appreciate we have the additional tools now to be able to get at that end. i meet entrepreneurs that say the security that comes from universal care is a factor in their decisions to invest in massachusetts. we welcome that. >> con tear -- contrary to public influence, the bond rate

is up, the budget is balance -- >> we have more work to do. but i'm proud of it. >> you've done a great job. thank you. >> chairman recognized mr. walden. >> thank you for being here. my home state of oregon has tried to innovate. i was part of the legislature when we implemented the health care plan, and i've been an employee for 20 years and spent five years on a community nonprofit hospital board. i've on every seat at the table trying to figure out how to make health care more affordable and able. one the things i occur from the hospital days was the shift that occurs when the government doesn't reimburse enough. that especially is true, i believe, on medicaid. that is probably the least reimbursement. you have cost shifting going on from medicaid and medicare, which drives up the insurance cost, paid for by those who are trying to provide it, small

employers of america. governor patrick, you expressed sympathy for. the commonwealth has said that massachusetts has the highest average family premiums in the country. is that still the case? >> i don't believe it is. but i will say that we have -- we have trended about a point or so higher than the escalation even nationally over a decade or so. >> but as you've tried to bring everybody into the pool, your cost have continued to escalate beyond the original projections; right? >> no, not beyond the original projections, due respect, congressman. but the issue of premium increases -- >> right. >> -- is a problem across the commonwealth and all across the country. >> governor barbour, i know that senior senator john wyden and scott brown has teamed up to give states more flexibility.

the president seemed to embrace that concept. i'm curious, does that go far enough? to give you the earlier out at 2014? if not what should we be doing? >> of course, the devil is in the details. the things that concerned me is the thing that is are in statute we are told the states will still have to do. and governor patrick has been talking about and answered your question how his cost didn't go up and he didn't have people drop insurance. massachusetts already had a very, very expandive mandatory standard benefits package. most states, particularly rural states don't. we get saddled with a standard benefit package like massachusetts, that's why our employers will drop coverage. their premiums will skyrocket. if it doesn't give us relief

from that and similar things, it really not much help. >> right. governor herbert? >> as i mentioned earlier, how flexible is flexible? there is not absolute flexibility. it is a maintenance of effort, still required the essential benefit package stays the same, the eligibility for medicare still is there. if we get the outcomes that we the federal government say to the state, then you have flexibility. and that really is not flexibility. >> governor patrick? >> i think from a policy point of view, congressman, the act is probably -- the bill is probably -- we're probably indifferent. because as i said we're so far down the path. and we have so much flexibility under our existing 1115 waiver, and there's plenty of flexibility in the act. >> so i want to go to another topic. there's some reports out in the last day or two and over time about the waste and fraud. both in medicare and medicaid. upwards of 10% of the program, the gao and