Byron Schlomach

Expanded Medicaid, Shrinking Wallets

Posted on January 24, 2013 | Author: Byron Schlomach
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The federal health care law included a provision asking all states to expand their Medicaid programs to cover all adults and children up to 133% of the federal poverty level. Right now, a little less than a fifth of the state’s population is given free healthcare through Medicaid; if the state expands Medicaid nearly a fourth of Arizona’s population would be covered.

This expansion would cost a lot of money we don’t have. Even with the federal government picking up most of the tab, estimates put the cost of expansion for Arizona at $125 million in 2016 alone. The yearly cost would rise as the federal share of the cost ratchets down to 90 percent. As the federal government’s financial condition worsens, states will likely have to pick up even more of the cost.

Governor Brewer wants a “circuit breaker” that will turn off the expanded program if the federal share ever fell below 80 percent. While the Supreme Court said states can’t be compelled to expand Medicaid, it’s an open question whether they can be compelled to continue an expansion once agreed to. If, in the future, the federal government insists that we keep expanded Medicaid coverage as a condition of keeping any Medicaid funds, we cannot count on our own state leaders to challenge that in court. After all, the Obama administration takes the position that Obamacare’s expanded coverage of children is a valid mandate, in clear contradiction to the Supreme Court’s decision. Still, state policymakers are doing nothing to challenge this position.

But there’s more at stake than dollars and cents. Expanding Medicaid means the state will participate in enforcing the health insurance mandate. After all, everybody is required to have health insurance, including Medicaid recipients, and the state will be put in a position of reporting when recipients drop off the Medicaid rolls. Legislators who value fiscal prudence, the health of the state’s future economy, and individual liberty should not support the expansion of Medicaid.

Learn more:

The Hill: White House drops support for major Medicaid cut

The Advisory Board Company: Where each state stands on ACA's Medicaid Expansion

Forbes: Why States Have a Huge Fiscal Incentive to Opt Out of Obamacare's Medicaid Expansion

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