Medicaid Expansion: Too Good to be True

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Medicaid Expansion Is Too Good To Be True In the months since the Supreme Court ruling that made the Obamacare Medicaid expansion optional, the state costs associated with expansion still remain highly uncertain—making expansion a dicey course for states and their budgets. Indeed, states should not lose sight of the fact that the original Medicaid expansion was coercive for a reason. As Nina Owcharenko, director of Heritage’s Center for Health Policy Studies, points out, “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. States are still weighing their options. Many of them have commissioned studies to project the state costs of expanding. However, all cost estimates reflect the assumptions used to construct them, and using different assumptions can result in estimates varying wildly between (and sometimes within) states. For instance, Florida Governor Rick Scott (R) released a study that projected that an Obamacare Medicaid expansion would cost his state $26 billion over 10 years. A different Florida study made alternative assumptions, concluding it would cost Florida about $3 billion over 10 years. The major difference between the competing studies is that Scott’s does not assume that the federal government’s enhanced match rate will continue as described in the law. Scott is right to distrust the federal government. In the Administration’s 2013 budget, the President proposed using a “blended” reimbursement rate for Medicaid. A blended rate could cost states considerably more than the funding levels promised in Obamacare. According to Heritage’s Center for Data Analysis calculation, under the Obamacare rates it would cost the 50 states a total of almost $42 billion from 2014 to 2022, while under one version of a blended rate it would cost states about $120 billion over the same period. Discover what other states are doing about expansion >> Expanding Medicaid Plans is a Costly Mistake for States Health Care Spending Remains Stable, But Not For Long Obamacare’s Exchanges: State of the States Will Obamacare End Up Like Prohibition? FLASHBACK: Heritage Experts on the Risky Business of Obamacare for States   $2 Trillion THE INCREASE IN ENTITLEMENT SPENDING DUE TO OBAMACARE  Over the next ten years, entitlement spending will drastically increase due to the implementation of Obamacare. Learn More >>     About The Heritage Foundation Founded in 1973, The Heritage Foundation is a research and educational institute — a think tank — whose mission is to formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defense. The Heritage Foundation | 214 Massachusetts Ave NE, Washington, DC 20002 | 202.546.4400 | heritage.org