Medicaid Expansion Takes Over The States

By Dick Morris on December 10, 2013

The growth of Medicaid under ObamaCare effectively takes over all of state spending for the next few years. Forget improvements in education, state universities, or other programs. All the money is going to go for Medicaid.

Already Medicaid accounts for 15% of all state spending totaling $450 billion a year. But, under ObamaCare, it is exploding.

In the state of Washington, where the enrollment process is the furthest advanced, 90% of the enrollments in the state exchanges has been in Medicaid — 52% among those newly eligible under the expansion contained in the ACA and 38% who were previously eligible but hadn’t enrolled.

While the feds will pay the full costs for those who are newly eligible for three years, 90% for another three years, and who knows how much after, the states will only get their normal federal reimbursement for those who have always been eligible but only now applied. Caught up in the hoopla about getting insurance, they are logging onto their state and federal sites only to be told that they are eligible for Medicaid and always have been. But now they are signing up. And the states will only, on average, be able to look to Uncle Sam for about 60% of the cost.

This dragnet is transforming Medicaid from a large program into an enormous one and, with the states on the hook for almost half of the costs for those already eligible, it is a program that the states themselves must finance.

Preliminary estimates suggest that the state share of the new Medicaid expansion could exceed $5 trillion — about 15% of all state revenues. And this sum will come due all at once in the next fiscal year.

Forget any other program. Forget education. Forget about better schools. Forget better roads or mass transit or policing or mental health or local aid. Medicaid is going to suck up all the oxygen in the room.

Indeed, de facto, Medicaid is becoming the single payer that Obama and the liberals have always dreamed of. It stems from the failure of ObamaCare to truly appeal to the middle income middle class. But Medicaid is the de facto order of the day and its expansion is dooming states to a high tax, low services future.

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