Obamacare Bankrupting States
by Kate Obenshain (more by this author)
Posted 12/23/2009 ET
Sen. Ben Nelson’s “Cornhusker Kickback” for Nebraska may have given Harry Reid his coveted sixtieth vote, but it comes at a price for the other states, states that are already feeling the hammer of rising Medicaid costs.
Just coming to light is a concern that has been giving governors heartburn for months: the fact that states are going to be hit with a monstrous financial burden with the passage of Obamacare, and none are in a position to handle it.
President Barack Obama intoned ominously just last week that “the federal government will go bankrupt” unless his federal takeover of health care passes Congress. Few believe the rising costs resulting from this health care bill will be much of a protection against bankruptcy. One thing is for sure, though: passage of the health care bill with a massive expansion of Medicaid will bankrupt the states.
Ohio spends 39 percent of its state budget a year on Medicaid. Massachusetts spends 27 percent. On average, states fork over 20 percent of their annual spending on this joint state-federal program that originally began to assist women and children in poverty and the disabled.
Now Congress is considering the inclusion of a massive expansion of Medicaid in the Obamacare bill, one that will dump about 18 million Americans into a program that, according to a broad consensus, provides substandard medical coverage. Nelson claims he urged Sen. Reid to drop the Medicaid provision, but since that is the foundation for Reid’s bill, he isn’t going to do it. Hence Nelson’s sweetheart deal. Exempting Nebraska won’t kill the bill. Exempting all the states would.
Who is going to get stuck with half the price tag? The states. Well, the states minus Nebraska. And probably Nevada, where Reid is trying desperately not to get the voters’ boot. Reid and other deal makers are trying to camouflage the impact, saying the federal government will pay more of a percentage for new enrollees, but within five years the responsibility would fall entirely on the states -- states which even now cannot meet their Medicaid responsibilities. Draft bills include a provision that in the event that the federal government cannot make its payments to the states, the states would be required to make up the difference.
With new federal oversights, states will no longer be able to manage their own participation in Medicaid, such as setting standards for who is eligible for Medicaid. The feds will use the regulations to substitute its own judgment for the states on numerous issues, including on eligibility. As it stands now those making somewhere between 133 and 150 percent of the poverty level, or around $30,000 will become eligible.
To gauge the impact of the new financial burden on states, take a look at New Hampshire. Currently, New Hampshire state government pays only for the children of Medicaid eligible families whose income is less than 66 percent of the federal poverty level. The health care bill would, at a minimum, double the income families could earn and still be eligible for Medicaid. Florida would see its Medicaid rolls grow to 4 million (from 2.6 million) at a cost of $1.6 billion.
more here : http://www.humanevents.com/article.p...t=yes&id=34959