Obamacare will add an estimated 11 million people to the Medicaid rolls and the legislation only accounts for offsetting the federal share of Medicaid. Under Medicaid, states must provide matching dollars under a federal formula known as the Federal Medical Assistance Percentage.The federal share varies from state to state, but averages 57 percent of the total cost of Medicaid. That means that states must pick up, on average, 43 percent of the cost.
The Congressional Budget Office (CBO) has estimated that adding 11 million new people to Medicaid will cost federal taxpayers $287 billion over 10 years. That means states will be handed a $216 billion unfunded mandate over that same period. States will either be forced to eliminate other services to pay for this mandated spending, or raise taxes.
Governors were bipartisan in their opposition to requiring the states spend more money on healthcare without providing more dollars. Colorado Governor Bill Ritter Jr. (D) wondered, “There’s a concern about whether they have fully figured out a revenue stream that would cover the costs, and that if they don’t have all the dollars accounted for, it will fall on the states.”
Mississippi Governor Haley Barbour (R), head of the Republican Governors Association said recently, “This huge expansion of Medicaid would be extremely expensive in my state. We anticipate that it would increase spending on Medicaid by 50 percent, and that’s money we don’t have. And other states don’t have it either.”
“As a governor, my concern is that if we try to cost-shift to the states, we’re not going to be in a position to pick up the tab,” said Washington Governor Christine Gregoire (D).
It is easier to make legislation “deficit neutral” when mandating that states spend more money, while providing no way to pay for it. This is hidden spending that will lead to future state and local tax increases.
This is the perfect example of why the 17th amendment (the one making senators elected by popular vote) was a colossal screw-up. If senators were still appointed by the states, the states would still actually have some say in issues like this, as this kind of issue would never go through the senate.
