October 03,2000

Roth Warns that Administration's Negligence on Closing Medicaid Loophole will Cost Program $127 Billion Over Next Decade

WASHINGTON -- Armed with new estimates from the Congressional Budget Office, Senate Finance Committee Chairman William V. Roth, Jr. (R-DE) today warned that the Medicaid program could lose more than $127 billion over the next decade if nothing is done to close a gaping loophole currently being exploited in the program. The Clinton Administration, after many promises of action to close it, has done nothing to end the hemorrhaging of funds from the program that helps poor children, pregnant women, the disabled and the elderly.

"For months, we have been waiting for this Administration to act to stop a Medicaid spending scam that threatens the financial integrity of this vitally important program, serving 40 million low-income pregnant women, children, individuals with disabilities, and senior citizens. For months, we have been assured that action is imminent, that the Administration wants to stop the bleeding and do the right thing. For months, we have waited in vain," Roth stated.

"Now we find that earlier estimates of the cost saw just the tip of the iceberg, and unless we act to fix the problem, more than $127 billion will be inappropriately spent over the next decade. This is waste on an unconscionable scale. It endangers not only the integrity of the Medicaid program, but the program itself -- a program that serves our most vulnerable citizens.

"I would say to the Administration that the time for excuses has run out and the time for action has long since arrived. You had the opportunity to lead, and you declined. You could have protected the program, but you instead stood by the sidelines and watched this abusive practice become even more entrenched, even more difficult to stamp out.

"As a sign of how badly this loophole needs to be closed, the Congressional Budget Office tells me preliminarily that closing down the loophole will produce savings to the federal government of $3.7 billion next year, $46.6 billion over the next five years, and $127.6 billion over the next ten years.

"Faced with the Clinton Administration's inaction on this scam, it is now up to Congress to step in on behalf of the American taxpayer, and on behalf of all of those who care about Medicaid and want it to remain a strong and viable source of protection to vulnerable Americans. I am looking at all of my options for closing the loophole."