04/12/2011 02:58 pm ET | Updated Jun 12, 2011

Haley Barbour Says Cutting Entitlements Is About 'Financial Survivability Of The Government'

WASHINGTON – Mississippi Gov. Haley Barbour (R) invoked Tennessee’s experiment with expanding health care coverage –- and the state’s subsequent financial problems that forced it to reduce the program –- as an example of how social welfare programs need to be cut to balance state budgets.

“This is not about politics. This is about realistic financial survivability of the government,” Barbour said, after giving remarks that focused mostly on how states can improve Medicaid delivery, to an audience in the U.S. Capitol that included several Republican House members and staff.

Barbour, a likely GOP presidential candidate who told reporters he will announce whether he is running or not by the end of this month, paid homage to former Tennessee Gov. Phil Bredesen, a Democrat, for doing “what needed to be done” when he reduced enrollments in TennCare, Tennesee's managed health care program. Bredesen kicked about 170,000 people off the rolls, in part by removing people who were not eligible.

“It made people understand, this has got to be done,” Barbour said. “And Bredesen did it and did not flinch. I think it’s a real credit to him.”

Barbour, in the last year of his second term as leader of the Magnolia State, boasted that Medicaid -– which provides government-funded health care for the poor and indigent –- is run more efficiently in Mississippi than in most of the rest of the country.

The “error rate for eligibility” in Mississippi, he said, is 0.1 percent. But nationally, that rate is 6.47 percent, he said, of roughly $400 billion spent on the program each year.

“You can save money on entitlements,” he said, “by running the programs right.”

He also said that Medicaid recipients should be required to take annual physicals.

“There is one of the places right there where we could make significant savings in Medicaid,” he said. Barbour said it would be a way “to find the problems early, to start dealing with them early, to get people compliant with what they ought to be doing with medicine and lifestyle.”

Barbour’s message about Medicaid aligns him in part with Rep. Paul Ryan’s (R-Wisc.) budget, unveiled last week and set to pass the House this week. Ryan proposes changing Medicaid so that the federal government would give states block grants instead of conditional matching funds. According to Ryan, this would allow states more flexibility with fewer strings attached.

Block grants would reduce overall money spent on Medicaid programs, but Barbour said that, as a governor, he would gladly take less from the government if it meant Washington would less to his state what they could and could not do.

“We take great offense to the idea that Washington loves our citizens more than we do,” he said, pointing out that the State Children’s Health Insurance Program (SCHIP) is a block grant program.

Barbour dismissed a Congressional Budget Office analysis of Ryan’s plan that said health care costs for elderly persons in Medicare would rise starting in 2022 under the proposal unless a shift toward a more consumer-oriented market brought overall health care costs under control.

“Forgive me if I’m a little skeptical about the initial CBO numbers and this that or the other,” said Barbour. The governor seemed to be mistaking the document for a score of legislation, but Ryan has not yet produced legislation. Far greater uncertainties are built into the CBO's analysis.

His skepticism springs from the CBO's score of Obama's health care law. Conservatives say the law will not reduce the budget deficit because $575 billion in cuts to Medicare it includes cannot be counted as both going into the Medicare trust fund and helping to pay for the expansion of Medicaid to 20 million more Americans.

Nonetheless, Barbour clearly articulated his overall philosophy about how health care costs are going to be brought down.

“Until we have price transparency, and transparency in outcomes, and the consumer is given the choice that includes having the consumer having some skin in the game, you’re never going to get control of spending in healthcare,” he said.

Discussing the Tennessee experiment allowed Barbour to raise the specter of RomneyCare –- the Massachusetts health care plan implemented by fellow GOP presidential hopeful Mitt Romney, the state’s former governor –- without doing so in an overtly political or personal way.

“States make mistakes,” Barbour said, but added that state programs are a good way to experiment, rather than a federal mandate as outlined in Obama’s health care overhaul, which Barbour and many Republicans want to repeal.

“It’s better than making the whole country make a mistake. It’s a lot easier to undo,” he said.

Barbour's claims, in some ways, echo Romney's arguments. The former Massachusetts executive, who announced his exploratory committee on Monday (one day before the five-year anniversary of the law), describes his health care program as a conservative plan because it falls within the Federalist vision of letting states act as policy laboratories.

But Barbour was quick to reject the Massachusetts plan when asked about it.

“If Massachusetts wants that, more power to them. That’s their business. We don’t want it. It would not be a good system for us,” Barbour said. “And we will not choose it in Mississippi and frankly, we oppose the Obama administration trying to force it on us.”

Asked whether Romney’s program and Obama’s program are the same, Barbour told reporters, “The similarities are obvious.”

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