Better in their words…

Let me know if this surprises you…
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WSJ 4/8/2016
By Justin Haskins

Legislators in Arkansas, New Hampshire, South Dakota and elsewhere have spent the past three months considering whether they should expand Medicaid under the terms of the Affordable Care Act, or renew their previous commitment to do so. But new projections by the Congressional Budget Office (CBO) and Joint Committee on Taxation (JCT) indicate the federal government’s cost of Medicaid expansion over the next decade will be significantly higher than originally expected. This raises serious questions about the program’s financial viability.

Under ObamaCare, states that expand Medicaid to cover adults with incomes below 138% of the federal poverty level get reimbursed 100% of their costs for these newly eligible enrollees through 2016. The law then requires the federal government to gradually reduce its share down to 90% by 2020. The remaining costs will be covered by the states.

In March 2015, CBO and JCT projected the net cost of the Obama-Care’s insurance coverage provisions— including Medicaid expansion and health insurance subsidies provided through the exchanges—to be $1.26 trillion from 2017 to 2026. Their newest projections for the same period, released on March 24, are $136 billion higher.

Why? “The largest difference from the March 2015 projection,” the report states, “stems from an increase in projected spending for Medicaid because more people whom the ACA made eligible for Medicaid are expected to enroll than were anticipated.”

Thirty-one states and Washington, D.C., have expanded Medicaid, many figuring that the federal government’s agreement to cover a significant portion of the expansion costs was too good to pass up. The result: Medicaid rolls in Arkansas, California, Colorado, Kentucky, Nevada, New Mexico, Oregon, Washington state and West Virginia have increased by at least 50% from September 2013 to December 2015—and overall enrollment in expansion states (including the Children’s Health Insurance Program, Medicaid for kids) jumped to 49 million from 36 million.

The catch is that of these additional enrollees, only the “newly eligible” are covered 100% by the federal government. The others who signed up under the old guidelines are covered by the federal government at the old rate, now about 50%. The states pick up the rest. Many states now realize that their Medicaid costs may be too large to cover in the near future.

In Illinois, Medicaid expansion may cost the state nearly $1.5 billion more than originally projected between 2017 and 2020. In Washington state, the state budget had to be increased by $2.3 billion in 2015 to cover expansion costs. In Ohio, where Gov. John Kasich, a Republican presidential hopeful, has repeatedly defended his decision to expand Medicaid, the program has experienced $2.7 billion in budget overruns since expansion was implemented two years ago.

The 2016 federal deficit is expected to grow—for the first time since 2009—to $544 billion. If the CBO and JCT Medicaid projections are accurate, it seems unlikely the federal government will continue covering newly eligible Medicaid patients at the extremely generous 90% rate. States that have taken the bait and expanded Medicaid will be on the hook for tens of thousands of patients whose care they can’t afford.

Mr. Haskins is executive editor of the Heartland Institute.

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