ObamaCare: Handing the Bill to the States

President Obama and his Administration are experiencing a series of blowbacks against ObamaCare, the Democrats' signature piece of legislation. Unfortunately for the President, it does not look like this trend will end anytime soon.

In November, Democrats lost their majority in the House of Representatives in an election cycle that largely focused on ObamaCare. The new Members of the Republican majority are fully committed to repealing the President's healthcare law and the Republican Leadership immediately scheduled a vote on ObamaCare repeal - H.R. 2 "Repealing the Job-Killing Healthcare Law Act."

ObamaCare also received a major setback on December 13, 2010 when federal judge Henry Hudson issued a decision on the lawsuit brought by Virginia's Attorney General challenging the law's individual mandate. Judge Hudson ruled that this provision - which requires every American to carry a health insurance policy - is unconstitutional, and, further, that Congress exceeded its Constitutional powers by enacting this provision.

Meanwhile, a similar case is also making its way through a federal court in Florida. Florida is one of 20 states (in addition to Virginia) suing the federal government over the constitutionality of ObamaCare. Several newly-elected Republican governors, including Gov. Matt Mead in Wyoming, have promised to join the lawsuit this year.

While the constitutionality of the individual mandate has drawn the bulk of the media attention surrounding the states' opposition to ObamaCare, several new cost-analysis studies reveal that the states have additional reasons to oppose the new law. Each of these studies concludes that the provisions of ObamaCare that expand Medicaid eligibility will bankrupt the states. ObamaCare requires states to expand Medicaid eligibility up to 138% of the Federal Poverty Level (FPL), which will cause states' Medicaid programs to swell, as millions of new enrollees sign up for benefits nationwide.

One of the major problems for states is that ObamaCare employs a deceptive funding gimmick to lure states to expand Medicaid eligibility. The new healthcare law promises federal funding to cover three years of the additional Medicaid costs that states incur, beginning in 2014. In 2017, however, the federal funding decreases (and continues to decrease each year between 2017 and 2020). The result will be a massive hole in many states' budgets, which will yield either further deficit spending or drastic tax increases for state residents. Further exacerbating the funding burden for the states is the fact that the federal government does not pay for the additional overhead and administrative costs related to the expansion of Medicaid.

A survey of the available of information about the impact of ObamaCare's Medicaid expansion and its impact on the states reveals a bleak budget forecast for the next decade.

Florida:
Florida's Agency for Health Care Administration predicts that ObamaCare will cause the state to experience a $1.1 billion increase in Medicaid expenses in 2017 alone.

Indiana:
Indiana estimates that the between 388,000 and 522,000 new enrollees will apply for benefits under the state's Medicaid program with almost half of these enrollees (248,000) moving over to Medicaid after dropping out of their prior (mostly private sector insurance) to receive taxpayer-funded healthcare. Providing this expanded coverage will cost an additional $2.59 billion to $3.11 billion over a 7-year period.

Mississippi:
Milliman, Inc., which performed an outside analysis for the State of Mississippi on the costs for the expanded Medicaid program, estimates that Mississippi will add between 206,000 and 415,000 people to its Medicaid rolls due to ObamaCare. The cost of this expansion will be more than $2.59 billion over 10 years.

Nebraska:
ObamaCare will cause nearly 20% of all Nebraskans to be covered by Medicaid.

Nevada:
The cost for Nevada's Medicaid program is expected to increase by nearly 50% by 2020 because of ObamaCare.

Ohio:
According to a new study from the Buckeye Institute, Medicaid expansion under ObamaCare will bankrupt the state in the next decade. A family of four in Ohio currently pays nearly $2,000 in taxes each year to finance the state's Medicaid program. The new healthcare law dramatically increases that burden for Ohio taxpayers.

Texas:
In Texas, the state government has concluded that ObamaCare could add up to an additional 2,000,000 new people to the Texas Medicaid program, which would cost state taxpayers nearly $27 billion over the coming decade. In light of these startling facts, Texas Governor Rick Perry (R) is currently investigating the possibility of withdrawing his state from the federal Medicaid program, and instead putting in place a more efficient program that Texas would administer and oversee.

Washington:
According to a new study by the Washington Policy Center, the State of Washington is faced with a decision to either opt out of Medicaid or eliminate its state-based healthcare programs for low-income residents.

Wyoming:
This Medicaid expansion even threatens Wyoming, which is one of the most fiscally responsible states in the United States. The state recently conducted a study on the burden of expanding Medicaid, which concluded that Wyoming will have to consider dropping out of Medicaid. Wyoming is in a particularly vulnerable position because ObamaCare provides for even more Medicaid funding for "frontier states" (including Wyoming). This funding declines precipitously after 5 years, leaving the frontier states to shoulder all of the new costs associated with the ObamaCare programs that are being implemented in the state.

Even before ObamaCare was enacted, most states were struggling to afford their Medicaid expenses. ObamaCare's Medicaid expansion accelerates the states' budget crises. State legislators and governors now must make a difficult decision: reject ObamaCare's temporary funding for Medicaid expansion, or go down the reckless path of expanding an already-untenable entitlement program that will inevitably lead to massive tax increases.

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Shonda Werry is a former staffer at the Senate Republican Conference from 2004 to 2007, and has extensive public policy experience. She currently serves as the Executive Director of the American Healthcare Education Coalition, www.healthcare-coalition.org