The
Heritage Foundation...
States
Should Wait Before Accepting Obamacare
The Supreme
Court upheld Obamacare’s individual mandate to purchase health
insurance, but
it also struck down part of the law. That part—forcing states to expand
their
Medicaid programs—offers governors some much-needed relief.
Expanding
Medicaid, the government health insurance program for the poor and
disabled,
was one of President Obama’s main ways to increase the number of
insured people
through Obamacare. This was no magic solution for the uninsured,
especially
since Medicaid is in need of reform, not expansion.
States’
share of the cost of Medicaid is already crushing state budgets. “In
the past
decade, Medicaid spending has increased at nearly twice the rate of
states’ tax
revenue,” according to a new report.
The only
ways to expand Medicaid are to raise taxes, cut other state programs,
or slash
health care providers’ reimbursements in Medicaid even more. And so
far, the
majority of America’s governors have said they won’t do it.
Governor
Bob McDonnell (R–VA) sent a letter to President Obama on behalf of the
Republican Governors Association: “Before making any final policy
decisions,”
he explained, “governors must carefully consider the short and
long-term
implications of an expanded entitlement program and the consequences of
significantly increasing the size of government to manage these
programs.” The
question of a Medicaid expansion faces every state, including
Democratic
governors who are still on the fence.
Governor
Phil Bryant (R–MS), who has declared that his state will not expand
Medicaid,
explains the necessary trade-off between state priorities: “I would
resist any
expansion of Medicaid that could result in significant tax increases or
dramatic
cuts to education, public safety and job creation.”
Obamacare’s
unconstitutional mandate on the states was an all-or-nothing
proposition:
States would have been required to expand their Medicaid programs to
cover all
individuals up to 138 percent of the federal poverty level or risk
losing all
of their federal Medicaid funds.
As
Heritage’s Nina Owcharenko noted, Long before the Supreme Court’s
decision to
strike down the Medicaid mandate on the states as unconstitutionally
coercive,
opponents of the health care law argued that it would be financially
unsustainable and administratively unworkable. The Court’s decision
likely puts
the law on a faster pace to collapse.
The Court’s
decision definitely exposes President Obama’s promise to reduce the
number of
uninsured in the country—half of the reduction in uninsured promised
under the
law was based on mandating that states expand Medicaid.
And that
isn’t the only broken promise. It may also lead to health care costs
increases.
The law stipulates that only individuals who are not eligible for
Medicaid can
qualify for Obamacare’s new federal subsidy. With the Court’s decision,
many of
those who would be Medicaid-eligible under an expansion—specifically
those
above 100 percent of the FPL—will now qualify for the federal subsidy.
Heritage
estimates that there are between 3.5 million and 6.2 million people who
will
now qualify for the subsidies, raising the cost of the subsidies
between $35
billion and $63 billion over 10 years. (These figures are based on
either 26
states opting out or all 50 states opting out of the expansion,
respectively.)
There’s
really no way to pay for this—by state or federal taxpayers. Between
now and
the election, states should not entangle themselves in implementing the
law, in
particular with regard to committing to a Medicaid expansion or even
pursuing
the Obamacare exchanges. Owcharenko writes that “Even if President
Obama is
reelected and full repeal fails, the law will undoubtedly have to be
reopened.
States could push for reopening and use their power to reverse and
restructure
key provisions in the law.”
What
Medicaid needs is reform, not expansion. In President Obama’s words,
“it is not
sufficient for us to simply add more people to Medicare or Medicaid to
increase
the rolls, to increase coverage in the absence of cost controls and
reform.…
Another way of putting it is we can’t simply put more people into a
broken
system that doesn’t work.”
Read this
and other articles at the Heritage Foundation
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