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The states see rising costs of Medicaid rolling toward them like a giant fog. This health spending for low-income Americans already is the single largest component in state budgets, at 21.8 percent, the National Association of State Budget Officers (NASBO) reported.
Many states, therefore, are scrambling to find ways to salvage their budgets before the destructive toll of ObamaCare strikes full force in 2014. That’s when 20 million more will be added to the rolls by ObamaCare. The states may well be rescued, however, if the national health overhaul is declared unconstitutional.
Meanwhile, some states may seek waivers or opt out of Medicare altogether for fear of going bankrupt. Florida could be the first state to leave the program. The main author of a plan to redo the state Medicaid program said Feb. 15 if the federal government rejects the state’s proposal for a waiver, Florida may put in place its own pared-down version. State Sen. Joe Negron said that Medicaid was expected to cost Florida $22 billion in the fiscal year that begins July 1.
Because Medicaid is financed jointly by federal and state money, opting out altogether would mean losing the larger share of federal funds. Negron said Florida would use its own share of Medicaid money to provide benefits to “those on Medicaid we believe are the most vulnerable,” according to a Jacksonville Times-Union story.
Texas state Rep. Bryan Hughes said Medicaid already consumes 26 percent of his state’s budget. Included in that total are payments covering half of all births in Texas and two-thirds of all nursing home care. Hughes said ObamaCare threatens state sovereignty.
Medicaid reform should permit states—as the laboratories of policy ideas—to experiment with more innovative and workable designs for health care for the poor.
“Medicaid’s a black hole,” said Rep. Bill Cassidy, (R-LA), a physician, in a Feb. 9 interview. “It does not provide access because it pays so poorly, specialists, for example. But despite paying so poorly It’s bankrupting the states and…the care it does provide is below quality. And so it’s the antithesis of where we want to be with reform.”
The state expenditure report of the NASBO stated that fiscal 2009 and 2010 represented two of the most difficult years for state fiscal conditions since the Great Depression. The report said the combination of a loss of Recovery Act funds [the stimulus package] and the continuation of depressed levels of tax collections “are likely to result in the perpetuation of challenging fiscal conditions for fiscal 2012 and beyond.”
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