FOR IMMEDIATE RELEASE CONTACT: Todd Mitchell

March 1, 2011 202-297-0232

MEDICAID EXPANSION IN HEALTH CARE LAW TO COST

NEW JERSEY NEARLY $1.1 BILLION THROUGH 2019
Gov. Christie says New Jersey faces, “significant challenges” as a result of health law’s federal mandates
WASHINGTON, DC — A new report reveals New Jersey would see a nearly $1.1 billion increase in Medicaid spending under the
new health care law U.S. Rep. Leonard Lance (NJ-7) announced today. The study was released prior to a hearing before the House
Energy and Commerce Committee examining the new health care law’s impact on Medicaid and state health care reform. Lance is a
member of the Committee.

“Governors from both sides of the aisle, including Governor Christie, are deeply concerned about the new burdensome Medicaid
mandates in the law and their impact on current state budgets,” Lance said. “State governments must be given the flexibility to create
innovative cost-effective health safety net programs that make budgetary sense.”

The bicameral report, prepared jointly by the House Energy and Commerce and Senate Finance committees, provides an in-depth
state-by-state analysis of the financial impact the Patient Protection and Affordable Care Act (PPACA) will have on state Medicaid
programs. According to the data the health law will cost New Jersey at least $1.078 billion in added Medicaid costs through 2019. A
copy of the full report can be viewed at: http://energycommerce.house.gov/media/file/PDFs/030111MedicaidReport.pdf.

The new federal health-care law imposes a mandate known as the maintenance of effort (MOE) requirement, which prohibits states
from reducing their Medicaid eligibility standards. Specifically it denies states the full ability to manage their Medicaid programs to
fit their own budgets and their own unique Medicaid populations. This restriction, combined with looming state budget deficits and
balanced budget requirements, means governors are faced with dire fiscal situations.

MOE flexibility is one of Governor Chris Christie’s top fiscal priorities. In a letter to Energy and Commerce Committee Chairman
Fred Upton (R-MI), Gov. Christie shared his views on what he called, “the significant challenges the State of New Jersey faces as a
result of federal mandates in the Medicaid program and the Patient Protection and Affordable Care Act (PPACA).”

Christie called on Congress to reverse the burdensome MOE mandates and instead provide greater flexibility to manage the program
at less cost. “Neither [the new health care law] or Medicaid provide the flexibility states need for the challenges of today or
tomorrow. Congress needs to provide states with the freedom to determine how best to meet the need of its citizens,” Christie
wrote in a letter submitted into today’s committee hearing record by Rep. Lance.

For his part, Rep. Lance has joined other members of the House Energy and Commerce Committee in crafting a proposal to roll back
the new health care law’s provisions and give states like New Jersey the flexibility to maintain a safety net for the most vulnerable
while providing much-needed relief from the unfunded federal mandate.

“We must work together and quickly reverse the devastating consequences of the MOE mandate as well as the other onerous
portions of the law and replace them with reforms that expand access to care, lower costs and do not burden states with huge
unfunded mandates,” Lance concluded.

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