June 13, 2011 The Honorable Henry Waxman The Honorable Fred Upton Ranking Member, Committee on Energy and Chairman, Committee on Energy and Commerce Commerce United States House of Representatives United States House of Representatives Washington, D. 20515 Washington, DC 20515

The Honorable Joe Pitts The Honorable Frank Pallone, Jr. Chairman, Subcommittee on Health Ranking Member, Subcommittee on Health Committee on Energy and Commerce Committee on Energy and Commerce United States House of Representatives United States House of Representatives Washington, DC 20515 Washington, DC. 20515

Dear Chairmen Upton and Pitts and Ranking Members Waxman and Pallone:

The National Association of Counties (NACo) is very concerned about the effects that proposals like those in H.R. 1683, the State Flexibility Act, would have on the ability of counties to serve our citizens.

As you know, counties play a unique role in the Medicaid system: financing part of the non-federal share of Medicaid in twenty-seven states, serving as payers of last resort in twenty-three states, and providing a full range of mandatory and optional services to Medicaid beneficiaries across the country. NACo, therefore, opposes any proposal which, like H.R. 1683, would be likely to shift costs – currently shared under Medicaid – to counties.

According to the Congressional Budget Office, H.R. 1683 will give the states the flexibility to drop an estimated 400,000 people from their Medicaid and the Children’s Health Insurance Program (CHIP) rolls. CBO further estimates that 300,000 of these people will not be able to secure alternative coverage of any kind. Because H.R. 1683 does nothing to improve the health status of these newly uninsured, we can expect that many of them will continue to seek care in our county hospitals, clinics and nursing homes and apply for other county funded and administered assistance programs. Without the support of Medicaid, counties will either have to turn them away or raise local property taxes. We believe this “flexibility” would damage our already fragile local health care safety net systems.

Instead, NACo urges you to work to with your partners in county government to shore up the Medicaid program for present and future beneficiaries.

Sincerely,

Larry E. Naake Executive Director