08.15.2011 1

ObamaCare Medicaid Mandates Will Bust State Budgets, ALEC Members Warn

By Kevin Mooney — State officials who attended the American Legislative Exchange Council’s (ALEC) annual conference in New Orleans, La. earlier this month expect Medicaid costs to rise dramatically as a result of ObamaCare.

As it is, Medicaid currently accounts for about 17 percent of all state-level spending, according to StateHealthFacts.org. This exceeds what states spend on higher education and transportation put together, according to ALEC.

Under ObamaCare, states are required to extend their Medicaid programs to anyone earning up to 133 percent of the federal poverty level come 2014. This comes out to about $30,000 for a family of four. In addition to the Medicaid expansion, the new federal health care law also creates an individual health insurance mandate, which will further encourage those who were already eligible for benefits prior to the new legislation to now enroll. Moreover, the federal subsidies included as part of the new health care law will not cover the entire cost of the Medicaid expansion.

“Washington [D.C.] is trying to take control of everything and that’s not healthy for anyone,” said Rep. Noble Ellington, a Louisiana Republican. “We are already in the middle of a recession as it is, and if ObamaCare does kick in it will mean less jobs, less business activity and less opportunity.”

Ellington also serves as ALEC’s chair. He expressed concern about the constraints and restrictions included as part of the Patient Protection and Affordable Care Act (PPACA). States that are already facing financial pressure will find it difficult to absorb the higher costs, he said.

Bill Wilson, President of Americans for Limited Government agrees, expressing concern that the unfunded Medicaid mandates, “will have a potentially devastating impact on states who are struggling to maintain their current bond ratings, if left unchecked, ObamaCare may be the spending straw that breaks the camel’s back.”

Louisiana’s Department of Health and Hospitals has produced a report that shows implementation of ObamaCare will cost Louisiana in excess of $7 billion over a 10-year period. Between now and 2014, Louisiana health officials also expect Medicaid enrollment to grow by more than 50 percent.

Other states are reporting similar results.

In Oklahoma, for instance, implementation of PPACA will boost that state’s Medicaid spending by $11.4 billion during the first 10 years the law is in place, according to the Oklahoma Council of Public Affairs. In Kentucky, a new report from the Bluegrass Institute, shows that by 2020 state and federal Medicaid spending on that state will be 63 percent higher than it was in 2009 if the law were not enacted and 80 percent higher with ObamaCare in place.

The “State Legislators Guide to Repealing ObamaCare” ALEC released earlier this year includes several recommendations crafted with an eye toward delaying and ultimately blocking the federal legislation. The Guide includes a description of ALEC’s “Freedom of Choice in Health Care Act, which provides for a “state-level defense against ObamaCare’s excessive federal power.” It also advises state lawmakers to enact a moratorium on ObamaCare rulemaking and to decline federal grant money that come with “federal strings.”

“States should let the federal government spend the time, money, and political capital required for implementation,” said Christie Herrera, ALEC’s health and human services task force director. “I don’t think that states will be able to escape federal rules if they decide to get involved. Barring congressional repeal or a Supreme Court decision, this law will go forward as enacted — so state legislators would be wise to step back and let the federal government take ownership over the consequences.”

Kevin Mooney is a contributing editor to Americans for Limited Government. You can follow Kevin on Twitter at @KevinMooneyDC.

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