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Broun: "Obamacare" Will Push All States Into Severe Economic Problems

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We have been seeing the budget battles of some states playing out in the form of protests and now more than ever the fiscal challenges facing many states are making headlines almost on a daily basis.

One of the expenditures states are required to pay for is providing Medicaid coverage and with the passage of health care reform more individuals will be rolled into the program.

On Tuesday, three governors—Haley Barbour (R-MS), Gary Herbert (R-UT) and Deval Patrick (D-MA) descended into Washington, testifying before the House Energy Commerce Committee on the burdens imposed by health care reform.

I caught up with two House members, both former practicing MD's—Rep. Michael Burgess (R-TX) and Rep. Paul Broun (R-GA) on the price tag of health care reform and the impact it could have on the quality of health care.

LL: What were the key take always from this hearing?

Rep. Burgess: First and foremost, all of governors thanked us for including them in the panel because some of them felt they were left out of the conversation when health care was discussed at the Blair House, when both the House and Senate decided on how the state governments would be tasked with part of the implication of the affordable care act through Medicaid.

This will create a big burden on the states and they will be one of the big players for providing health care for half of the uninsured population.

LL: How much of a burden will this have on the States?

Rep. Broun: It is a huge burden just because of the unfunded mandates. It's a 118 billion doll unfunded mandate on the states through 2023. My own state of state of Georgia will have a 2.46 billion dollar hit on their strained budget. We have a balanced budget amendment in our state constitution and to have that kind of economic hit on our already strained budget is going to further hurt my state of Georgia as well as every state in this country.

California for instance, will have a 19.4 billion dollar unfunded mandate through the expansion of Medicaid. This is just totally unsustainable. We need to repeal Obamacare and put in place some common sense, market based patient centered solutions and that's what the bill that I introduced, HR 299 (Repeal and Replace Bill) would do.

Rep. Burgess: States are concerned over the cost. Right now they have a mandatory population that has basic coverage but that population will be increased and how the state governments will deal with that increase and the costs associated with that needs to be addressed.

I have seen numbers where states will pick up as much as 5 million people. States right now are in the process of complying with the law but there is uncertainty because some judges at the district level have ruled that parts of it unconstitutional and if the bill is ruled unconstitutional by the Supreme Court they will have to unwind what they have done and they don't want to go through the expense.

LL: Could this push States over the economic ledge?

Rep. Broun: Right now there are about a half a dozen states facing short falls and are suffering. And you are absolutely right that if we continue to go down this road with Obamacare its going to push probably every state in this country into having severe economic problems. We already saw what TennCare in Tennessee did and that's what ObamaCare is going to do.

TennCare has been disastrous in Tennessee, and its going to be disastrous in every state in this country. That's why we are fighting real hard to appeal ObamaCare. Its absolutely critical because this alone is capable of creating problems for the states as well as individuals to force us into a socialized society.

LL: And the Health care reform that passed, emulates Massachusetts...

Rep. Broun: Massachusetts, "Romney Care" is nothing but ObamaCare in that state. If the federal government was not bailing out Massachusetts then it would have failed in that state I believe. It was just disastrous. We need to stop it.

LL: Are you afraid states will start what some call "health care rationing" such as Arizona recently did when it stopped funding certain organ transplants?

Rep. Burgess: States will be reverting to what is the minimum to what they can do. Some states are giving up pharmacy benefits for Medicaid benefits right now. They will try and save some money now because some benefits are not mandatory until the expanded Medicaid comes online in 2014. They will not call it rationing but they should.

It will instead be viewed and called an "uncovered benefit". In the House Bill when health care reform was passed the Health and Human Services Secretary would have the power to restrict access to certain medical procedures.

They used the word "rationing" in the bill. Historically, Medicaid reimbursements have never been great and with the Medicaid population expanding, states will have only so much to spend and they will cut reimbursements to doctors and hospitals and that would impact patient medical access. Meaning doctors would rather fill their waiting rooms with patients that have insurance which make higher reimbursements than Medicaid.

These Medicaid recipients might have the coverage on paper but not the access so in the end, they will have to go to the emergency room to be treated and that's what we are trying to eliminate.

Rep. Broun: It will absolutely destroy the quality of health care. It will also destroy jobs, individual state budgets as well as the federal budget. We need to have health care decisions be made between the doctors and patients. Not by some government bureaucrat in DC. I'll give you two examples out of my state on how health care reform is killing jobs.

I have a businesswoman who currently has eight employees and she wants to expand her business and hire two more people. But she is not going to do that because of the ObamaCare mandates on small business. I have another businessman who wants to make a 31 million dollar expansion in his business which would allow him to hire a lot more employees but he is holding back as well.

LL: Medical liability has really not been addressed. What would you like to see done here?

Rep. Burgess: It has bothered me all the way through this process that any sort of liability reform was never included in the healthcare reform bill. The President every now and then tosses out a bone and says we should do something.

Texas has a good system—caps on non-economic damages. There are some state solutions that were not really given serious weight during the debate of the health care law that should have been considered. Without leadership from the top, this can not get passed.

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A Senior Talent Producer at CNBC, and author of "Thriving in the New Economy:Lessons from Today's Top Business Minds."