Expanding Medicaid Plans: A Costly Mistake for States
States are already struggling to pay their Medicaid bills. Why put taxpayers on the hook to pay even more? Medicaid is the single biggest item in state budgets today. It consumes, on average, 23 percent of state dollars spent, pinching funds for other high-priority functions - such as education, transportation and emergency services. Yet expanding Medicaid was a central tenet of the Patient Protection and Affordable Care Act. It required states to open their program to all individuals earning less than 138 percent of the federal poverty level. The goal was to reduce the number of uninsured - by dumping 17 million Americans onto the Medicaid rolls. Such a huge expansion wouldn't come cheap, and cash-strapped states grumbled that they couldn't possibly afford it. So the architects of Obamacare decided to take a carrot-and-stick approach to get the states to play ball. The carrot: We, the feds, will pick up 100 percent of your expansion costs for three years, and lesser percentages thereafter. The stick: If you don't expand your program, we'll cut off all your federal Medicaid funds. The fact that the authors of Obamacare felt the need to threaten states with total defunding tells you that they knew many states would resist expanding their programs - even with 100 percent federal funding. Why? For starters, many state officials are leery of federal promises to pay program costs in perpetuity. Such skepticism is warranted. Read the full report now >>
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