In my last post I talked about the risk of unintended consequences that may lead 2 million people to be dumped onto the States’ Medicaid rolls if the federal government continues to contest the validity of mini-med health plans, such as those in place for McDonald’s employees. This is a highly controversial situation and the States are already in a tizzy over the potentially disastrous budget consequences of the new healthcare reform legislation known as PPACA without this added treat.
The reason for the States’ fury? PPACA will result in about 20 million additional Medicaid beneficiaries that will become, at least in part, the financial responsibility of the States around 2014. California alone, for instance, estimates that the additional cost to the state of the resulting 1.6 new Medi-Cal recipients would be about $3 Billion/year. If Meg Whitman becomes Governor, she can pay for that herself, but short of that, there is no plan on how to stretch already waning tax revenues to cover this new bill.
Not since DeTocqueville have we heard so much talk about Federalism (okay kids: remember your high school class on U.S. government? We’re talking states rights vs. federal control here). 14 states have banded together to sue the U.S. government, claiming that they have no right to force this burden from PPACA onto the states, which are already reeling from the worst economic downturn in recent history. Notably, California didn’t join in the lawsuit, probably because they could not scrape together the filing fees!
I was thinking about this when I saw this unbelievably believable chart this week:
Medicaid Enrollment Increased Close to 6 Million Since Start of Recession
Source: Analysis for Kaiser Commission on Medicaid and the Uninsured (KCMU) by Health Management Associates, using compiled state Medicaid enrollment reports.
In other words, forget the federal PPACA legislation, the last 3 years of economic catastrophe have driven 6 million new people onto Medicaid without anybody even trying. If the feds are smart, they’ll just let the economy continue to atrophy and they will meet their goal of 20 million new Medicaid enrollees–no messy lawsuit, no expensive legal fees.
We as a nation are now sitting with almost 1/6 of our population in a health plan intended for those who are well below the poverty line. Aren’t we supposed to be the richest nation on earth? Wow, what a sad state of affairs: 6 million people. That’s like the entire state of Missouri—new motto: The Show Me the Door State.
If the States are forced to spend an ever-increasing portion of their tax revenue on Medicaid, how are they going to pay for the increased need for prison space that will be necessary after they have closed all the schools? State parks are going to start looking like the world’s best-landscaped homeless shelters.
I am all for everyone having adequate health 
insurance, but how are we going to afford to live here without some serious change in how we operate our healthcare system. Whether you like the PPACA law or not, this Medicaid issue has come front and center as the result of economic circumstance. Democrats are pushing the PPACA as a matter of policy but there are few stepping out with bold suggestions about how to finance it for real. Republicans are licking their chops at dismantling the law, but how does that help us deal with the fact that our Medicaid ranks are swelling anyway due to a multi-year recession. Nice fiddling guys, but hey, that smoke you smell is Rome, Georgia; Rome, Indiana; and Rome, New York actually burning.
