ObamaCare shoves costs onto states

posted at 1:37 pm on September 28, 2009 by Ed Morrissey

Barack Obama and his allies in Congress insist that their plans to overhaul the American health-care system won’t increase the federal deficit.  So far, the CBO begs to differ, but even if one accepted that premise, it does nothing but shove costs off to the states.  According to the Wall Street Journal, the Medicaid expansion on which both HR3200 and the Baucus plan in the Senate is predicated will create massive budget crises in all 50 states:

Democrats want to use Medicaid to cover everyone up to at least 133% of the federal poverty level, or about $30,000 for a family of four. Starting in 2014, Mr. Baucus plans to spend $287 billion through 2019—or about one-third of ObamaCare’s total spending—to add some 11 million new people to the Medicaid rolls.

About 59 million people are on Medicaid today—which means that a decade from now about a quarter of the total population would be on a program originally sold as help for low-income women, children and the disabled. State budgets would explode—by $37 billion, according to the Congressional Budget Office—because they would no longer be allowed to set eligibility in line with their own decisions about taxes and spending. This is the mother—and father and crazy uncle—of unfunded mandates.

This burden would arrive on the heels of an unprecedented state fiscal crisis. As of this month, some 48 states had shortfalls in their 2010 budgets totaling $168 billion—or 24% of total state budgets. The left-wing Center for Budget and Policy Priorities expects total state deficits in 2011 to rise to $180 billion. And this is counting the $87 billion Medicaid bailout in this year’s stimulus bill.

While falling revenues are in part to blame, Medicaid is a main culprit, even before caseloads began to surge as joblessness rose. The National Association of State Budget Officers notes that Medicaid spending is on average the second largest component in state budgets at 20.7%—exceeded only slightly by K-12 education (20.9%) and blowing out state universities (10.3%), transportation (8.1%) and prisons (3.4%).

This accomplishes two tasks for Democrats in Congress and Barack Obama in the White House.  It shifts the costs off of the federal books, which allows them to hide a large increase in public spending for ObamaCare that won’t get covered by the illusory “savings” they predict.  Shoving more people into Medicaid also means that the states will have to enact large tax hikes or cut services elsewhere, placing all of the political risks on governors and state legislators while looking like Santa Claus inside the Beltway.

One might expect to hear screams of outrage from the state capitals, but Baucus has a plan for that, too.  His plan will temporarily raise payments to the states:

Mr. Baucus hopes to use his printing press to bribe the governors, at least for a time. Currently, the federal government pays about 57 cents out of every dollar the states spend on Medicaid, though the “matching rate” ranges as high as 76% in some states. That would rise to 95%—but only for five years. After that, who knows? It all depends on which budget Congress ends up ruining. Either the states will be slammed, or Washington will extend these extra payments into perpetuity—despite the fact that CBO expects purely federal spending on Medicaid to consume 5% of GDP by 2035 under current law.

Either way, taxpayers will have to foot these costs.  Regardless of whether the taxes come in the form of federal or state taxes, governments at some level will have to increase revenues to pay the bills.  States will have much less flexibility on how to manage the process, thanks to the federal mandates of Medicaid built into the ObamaCare legislation.

In short, it’s easy to be Santa Claus when someone else pays the bills.


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Ah, shovel ready is now explained.

Dhuka on September 28, 2009 at 1:38 PM

Look at that picture. A bunch of old white men. These Republicans are so out of touch.

Oh wait.

angryed on September 28, 2009 at 1:39 PM

So how does government rationed healthcare improve the health care for Americans?

Shouldn’t we all ask that question?

tarpon on September 28, 2009 at 1:40 PM

No problem! The states will just print money… oh wait

mankai on September 28, 2009 at 1:40 PM

All medicaid is done by the states. Any increase in it is an unfunded mandate. It’ is really unconstitutional.

But here is my mantra.

The problem is that our ‘representatives’ don’t represent us. . . they are constituents of Washington DC and their votes reflect that.

ThackerAgency on September 28, 2009 at 1:40 PM

No problem for us here in Illinois and Crook County, we’ll have the Olympics to pick up the shortfall.

///sarc

Knucklehead on September 28, 2009 at 1:40 PM

So once your federal pocket has been emptied, Obamacare will dive into your state pocket. Neat trick.

Cicero43 on September 28, 2009 at 1:43 PM

You mean 57 states right?:)

ohiobabe on September 28, 2009 at 1:44 PM

the federal government pays about 57 cents out of every dollar the states spend on Medicaid,

So that is about 1 cent per state?

WashJeff on September 28, 2009 at 1:46 PM

I wanted to say something witty about this development, but I’m getting to the point where I just don’t have anything left in the tank. I want to curl up in a ball and wake up on January 20, 2013.

Bru on September 28, 2009 at 1:46 PM

What do you mean “will create budget crises?” I think most states are already in budget crises, some of them very, very severe.

BigD on September 28, 2009 at 1:47 PM

Bru on September 28, 2009 at 1:46 PM

+1

becki51758 on September 28, 2009 at 1:48 PM

I think we should sell California and all it residents to Mexico. How much money would that bring in? Right-minded residents can migrate to Texas.

TXMomof3 on September 28, 2009 at 1:49 PM

Hey you think the Dems can throw in a “free” Wii, iPhone, and Kindle into the bill. I mean it’s all free…right????

Just A Grunt on September 28, 2009 at 1:49 PM

Lies, just lies from the mouths of our democrat leaders.

jukin on September 28, 2009 at 1:49 PM

I wanted to say something witty about this development, but I’m getting to the point where I just don’t have anything left in the tank. I want to curl up in a ball and wake up on January 20, 2013.

Bru on September 28, 2009 at 1:46 PM

You will end up sleeping through the desctruction of Earth on Dec 21, 2012 then (according to the Mayans). You want to miss that?

WashJeff on September 28, 2009 at 1:50 PM

I think we should sell California and all it residents to Mexico. How much money would that bring in? Right-minded residents can migrate to Texas.

TXMomof3 on September 28, 2009 at 1:49 PM

The Mexicans at least might get the oil off the coast.

WashJeff on September 28, 2009 at 1:50 PM

“It’s easy to be Santa Claus when someone else pays the bills.”

Pretty well sums up socialism and the Democratic Party. Sorry. That’s redundant.

Star20 on September 28, 2009 at 1:51 PM

In short, it’s easy to be Santa Claus when someone else pays the bills.

I see him standing in the rain
Giant deficit raindrops falling on him
He doesn’t even seem to care
He stands there and smiles as if just at me

And I know
(I know, I know, I know, I know)
He will make me rich and happy
(rich, rich, happy, happy).
Money in his hair
Money everywhere

I love the Money Man
Oh, I don´t know just why
His Hope and Change simply catches my eye
I love the Money Man
He seems so generous and kind
He sweeps thoughts of $$$$$$$$$$$$$$$$$ into my mind

I know I have to say bravo
(bravo, bravo)
He smiles over at me
It’s as if he takes me by the hand
And we walk
To break the bank alone

And I know
(I know, I know, I know, I know)
He will make me rich and happy
(rich, rich, happy, happy).
Money in his hair
Money everywhere

MB4 on September 28, 2009 at 1:51 PM

Now, who will bail out the states, all 57 of them.

rjoco1 on September 28, 2009 at 1:52 PM

I’m with ya on that. I think you may want to awaken earlier than January though. We will need your vote.

ZeeMI on September 28, 2009 at 1:52 PM

WashJeff on September 28, 2009 at 1:50 PM

I think I’d prefer watching the movie. ;)

becki51758 on September 28, 2009 at 1:53 PM

Maybe if taxes weren’t so high, people could afford to buy their own insurance.

But we need high taxes so we can pay for their insurance, because they can’t afford it. Because government takes it all.

What?

lorien1973 on September 28, 2009 at 1:54 PM

In short, it’s easy to be Santa Claus when someone else pays the bills.

I’ll soon take all my troubles over to Obama Rue
You know The One with the never ending Hope and Change shtick
He’s got a pad down on Pennsylvania avenue
He’ll be passin’ out little bottles of Obama Potion Number Nine

I’ll tell him that I’m having trouble with my health care payments
It’s gotten even worse in these last few weeks
He’ll kiss me on the cheek and he’ll made a magic sign
He’ll say “What you need is Obama Potion Number Nine”

He’ll turn around and gave me a wink
He’ll say “I’m gonna have my Michelle make it up right here in the White House sink”
It’ll smell like Chicago, it’ll look like socialist ink
I’ll hold my nose, I’ll close my eyes, I’ll take a drink

I won’t know if it is day or night
I’ll start grabbin’ everyone else’s money that is in sight
But when there’s nothin’ left to grab
It’ll break my little bottle of Obama Potion Number Nine

MB4 on September 28, 2009 at 1:54 PM

Apparantly, when they and the premier decided that we need the olympics in Chicago, everything elso was pushed to the back burner.

Congress should learn from Obama and just vote present on important matters and issues. It seems to be OK with the MSM so it must be OK

bluegrass on September 28, 2009 at 1:55 PM

Mr. Baucus hopes to use his printing press to bribe the governors, at least for a time. Currently, the federal government pays about 57 cents out of every dollar the states spend on Medicaid, though the “matching rate” ranges as high as 76% in some states. That would rise to 95%—but only for five years. After that, who knows?

Shoving it past the 2012 eleciton, are we?

Wethal on September 28, 2009 at 1:56 PM

I think most states are already in budget crises, some of them very, very severe.

BigD on September 28, 2009 at 1:47 PM

Yeah and unlike the feds, states don’t run deficits.

So we’re looking at massive tax hikes, in order to buy health care for people who can well afford to pay for it themselves.

At least they would be if we had tort reform, if states and the feds didn’t lard up insurance mandates with a bunch of expensive crap most people don’t want or need (e.g. sex change surgery) and if we had a national market for health insurance rather than 50 separate markets.

NoDonkey on September 28, 2009 at 1:56 PM

Oh yeah, who didn’t see this one coming?

Visualize 50 bags of flaming dog poop left on the steps of their respective state capitals.

10th Amendment anyone?

CPT. Charles on September 28, 2009 at 1:57 PM

I think a tax revolt is coming – VIA 2010 TSUNAMI

marklmail on September 28, 2009 at 1:57 PM

I think I’d prefer watching the movie. ;)

becki51758 on September 28, 2009 at 1:53 PM

Here you go then.

WashJeff on September 28, 2009 at 1:58 PM

Meanwhile, in the midst of all this healthcare madness, B.O. is concentrating his full faculties on what he considers to be his #1 Priority…………getting the 2016 Summer Games to Chicago, despite recent polls indicating that people living IN Chicago would rather the Games go to Rio!

But as I said, we are talking B.O.’s priorities. Never mind mundane trivialities like healthcare, Iran, North Korea, Afghanistan, etc. No, we HAVE to get the Games to Chicago!

Anyone else see anything wrong with this picture?

pilamaye on September 28, 2009 at 1:59 PM

You will end up sleeping through the desctruction of Earth on Dec 21, 2012 then (according to the Mayans). You want to miss that?

WashJeff on September 28, 2009 at 1:50 PM

It will take even less time with wimp-in-chief and spend other peoples money in office, hopefully, we will get through 2010…

UNREPENTANT CONSERVATIVE CAPITOLIST on September 28, 2009 at 2:04 PM

2010 baby, 2010!

GarandFan on September 28, 2009 at 2:04 PM

pilamaye on September 28, 2009 at 1:59 PM

He’s already planning the glorious ending of his second term.

Barry’s not even aware that his chance at a second term become slimmer by the day and he might not make it out of the first term, if we can recapture Congress and use one of a number of things he’s done to impeach and remove him from office, prior to the elections in 2012.

NoDonkey on September 28, 2009 at 2:05 PM

I want to curl up in a ball and wake up on January 20, 2013.

Bru on September 28, 2009 at 1:46 PM

You’d have to do that in an underground shelter to have any certainty of waking up alive at that point.

Chaz706 on September 28, 2009 at 2:06 PM

So basically the states will jack up taxes(if they haven’t already) on everyone to cover the massive deficits that result from these federally mandated programs. And Obama figures this is how he’ll manage to keep his promise to not raise taxes on people making less than 250 grand? By screwing over the states? How does he intend to close the huge budget gap the federal government is currently running?

Doughboy on September 28, 2009 at 2:06 PM

It will take even less time with wimp-in-chief and spend other peoples money in office, hopefully, we will get through 2010…

UNREPENTANT CONSERVATIVE CAPITOLIST on September 28, 2009 at 2:04 PM

As Rush just said, when it is time to go, make sure your last check bounces.

Just In Case, I do not believe in that Mayan crap.

WashJeff on September 28, 2009 at 2:06 PM

In short, it’s easy to be Santa Claus when someone else pays the bills.

A Santa Claus that can hand out vote-buying largess taken at the point of a gun.

What happen when the taxpayers don’t cooperate?

Chainsaw56 on September 28, 2009 at 2:08 PM

happenS

Sorry.

Chainsaw56 on September 28, 2009 at 2:08 PM

The costs, and the decisions, should be at the state level. Again, the federal government has no authority to legislate health care.

Harpoon on September 28, 2009 at 2:09 PM

by the way interesting story about push back from the states, from the Times:

ST. PAUL — In more than a dozen statehouses across the country, a small but growing group of lawmakers are pressing for state constitutional amendments that would outlaw a crucial element of the health care plans under discussion in Washington: the requirement that everyone buy insurance or pay a penalty.

rob verdi on September 28, 2009 at 2:10 PM

pilamaye on September 28, 2009 at 1:59 PM

There were several cynical posts at NRO Corner to the effect that the fix is in and Chicago will get them. Obama wouldn’t risk going if he were to lost so publicly.

So he’s not going to get the summer games to Chicago. He’s going (and so is his wife in a separate plane) just to get the glory for getting the games to Chicago.

It’s a photo op, nothing more. On the taxpayers dime.

Wethal on September 28, 2009 at 2:10 PM

Why aren’t the states screaming about the 10th amendment? It is their job to interpose on our behalf.

PrincipledPilgrim on September 28, 2009 at 2:11 PM

Where the hell are all the pissed off govenors?

UNREPENTANT CONSERVATIVE CAPITOLIST on September 28, 2009 at 2:13 PM

Why aren’t the states screaming about the 10th amendment? It is their job to interpose on our behalf.

As if. I live in the People’s Republic of Massachusetts. This state would elect a flatulent opossum if he was a Democrat.

zenscreamer on September 28, 2009 at 2:14 PM

Where the hell are all the pissed off govenors?

UNREPENTANT CONSERVATIVE CAPITOLIST on September 28, 2009 at 2:13 PM

Argentina.

WashJeff on September 28, 2009 at 2:16 PM

Is there any liberal proposal that doesn’t result in utter disaster? Good lord.

CP on September 28, 2009 at 2:17 PM

“You lie” will define the Obama presidency.

Schadenfreude on September 28, 2009 at 2:17 PM

Biden was brought in to be Barry O’s impeachment insurance. Don’t forget Nancy Pelosi is 3rd in line.

At this point a non Democrat majority in the house appears to be the best solution. Notice I didn’t say Republican majority either. Given the reins of power they are just as bad. I am for picking 435 names at random and seating them.

Just A Grunt on September 28, 2009 at 2:20 PM

PA increased a business tax that hits businesses assets and cash. That’s right, they’re taxing stuff that’s not even being moved or transferred. The tax was supposed to be phased out because it”s a stupid business killing measure, but now they are raising it instead.

This tax applies to my business, so my taxes are going up even though I make less than $250k per year. Thanks BO and Ed Spendell!

forest on September 28, 2009 at 2:21 PM

“You lie” will define the Obama presidency.
Schadenfreude on September 28, 2009 at 2:17 PM

But think about it: a guy shouts out “You lie” with both houses of congress, the president, and the VP present. How can we possibly know whom he was addressing?

Akzed on September 28, 2009 at 2:26 PM

After everyone sees the bill and the Dems include the illegals the biggest motto in America will be “Leave California or bust.”

Don L on September 28, 2009 at 2:27 PM

Is it still to early to talk about secession?

Rebar on September 28, 2009 at 2:28 PM

About 59 million people are on Medicaid today

The number of people on Medicaid should be a source of embarrassment.

Too bad Democrats see it as a reliable voting bloc.

John Deaux on September 28, 2009 at 2:28 PM

Tenth Amendment Center

Fletch54 on September 28, 2009 at 2:29 PM

These slimy leftist pigs have got to go.

rplat on September 28, 2009 at 2:30 PM

Am I seeing something AGAIN ???

Doesn’t this look surriptiously like the patient dumping scheme Michelle Obama was involved with??!!

Let’s dump the problem on the STATE”S BUDGET

UNREPENTANT CONSERVATIVE CAPITOLIST on September 28, 2009 at 2:31 PM

I am for picking 435 names at random and seating them.

+!00

zenscreamer on September 28, 2009 at 2:39 PM

I’d rather entrust the government of the United States to the first 400 people listed in the Boston telephone directory than to the faculty of Harvard University.

-William F. Buckley, Jr.

Wethal on September 28, 2009 at 2:50 PM

In short, it’s easy to be Santa Claus when someone else pays the bills.

\
Or…….
When you rob Peter to pay Paul…Paul never complains.

right2bright on September 28, 2009 at 2:52 PM

In short, it’s easy to be Santa Claus when someone else pays the bills.

Breaking News:

Santa Claus was laid off today, due to lack of work. Related: The North Pole was shuttered due to a drop in demand for toys and a huge decline in manufactured goods. CEO Rudolf says they expect to be closed until late 2012. The UNION Elves are crying their little eyes out to Obama & the Democrat Party….

TN Mom on September 28, 2009 at 3:02 PM

rjoco1 on September 28, 2009 at 1:52 PM

Humm, but this also means that to pass it they have to now get like 69 votes out of 114 in the Senate! Things are lookin up!

MikeA on September 28, 2009 at 3:08 PM

I knew this was why Feinstein is against it. She’s not a blue dog. She’s moderate, but she has taken a public stance.

AnninCA on September 28, 2009 at 3:12 PM

The number of people on Medicaid should be a source of embarrassment.

Too bad Democrats see it as a reliable voting bloc.

John Deaux on September 28, 2009 at 2:28 PM

I don’t think that’s true. Medicaid recepients I know, anyway, don’t vote. This is a highly underemployed/underpaid group, often with children to raise.

I have some complaints. One young woman I know is being pressued to have a tubal ligation by her doctor. I don’t say anything, but the doctor seems entirely too pushy to me.

And she had a very bad experience with the office staff being thoughtless about her medical history. Not good.

AnninCA on September 28, 2009 at 3:18 PM

The states are responsible for medicaid. That is their job. The Feds come up with funds and all that, but the states administer this program. That is why some states have more generous benefits than others. So anything the feds do to cut medicaid, will impact the individual states and their budgets.

I am surprised at how many people do not seem to know that.

Terrye on September 28, 2009 at 3:21 PM

Welcome to Zimbabwe West.

Skandia Recluse on September 28, 2009 at 3:22 PM

But, of course. I wondered when someone would pick up on the unfunded mandate of healthcare– one more way for this administration to obfuscate and pass the buck, literally.

Linnea on September 28, 2009 at 3:24 PM

She’s moderate,
AnninCA on September 28, 2009 at 3:12 PM

That explains it.
Only in California could a politician that compared restoring water rights to Pearl Harbor be called a moderate

chemman on September 28, 2009 at 3:27 PM

That explains it.
Only in California could a politician that compared restoring water rights to Pearl Harbor be called a moderate

chemman on September 28, 2009 at 3:27 PM

I’m not sure about the water rights stuff, but on security issues and on healthcare and other fiscal matters, she’s definitely moderate.

AnninCA on September 28, 2009 at 3:40 PM

Its seriously time to bring back Madison and Jefferson’s notions of interposition and/or nullification. Some brave Governor (Perry, anyone ????) needs to refuse to implement this crap.

Firefly_76 on September 28, 2009 at 3:44 PM

anninca: those i know on medicaid of voting age all vote. and they vote for Dems 100% of the time.

another point: here in the Commonwealth, we don’t have to worry about any mean old thing bambi might do cause our Governor is such great friends with the Won. oh wait, Timmy Kaine is DNC chair. who does he represent?

kelley in virginia on September 28, 2009 at 4:11 PM

The dirty little secret is a HUGE portion of these medicaid dollars is currently spent on ILLEGAL ALIENS!!!!!!!!!!!!!!!!! Just ask Los Angeles County how much of their medicaid budget is for illegals.

Oh Wait, they might not really know, they have sanctuary city policies out there!!!!

karenhasfreedom on September 28, 2009 at 4:38 PM

For some reason my ass hurts.

ThePrez on September 28, 2009 at 4:40 PM

Here’s a link to Perry’s letter to Baucus re: the ‘State-shove’…

http://governor.state.tx.us/files/press-office/O-BaucusMax20090923.pdf

Yellowdog12 on September 28, 2009 at 4:52 PM

I’m going to wake up soon. It’ll be 1985. We’ll have a REAL American as President. None of this socialist crap, and the world will fear us, not laugh at us. Hmm..I wonder what Iraq and North Korea would do with a “bombing starts in 5 minutes” President.

Jeff from WI on September 28, 2009 at 5:12 PM

Idiots…2010 can’t come fast enough!

BigMike252 on September 28, 2009 at 5:32 PM

I think we should sell California and all it residents to Mexico. How much money would that bring in? Right-minded residents can migrate to Texas.

TXMomof3

I volunteer for border duty to check their papers and backgrounds to make sure they don’t bring any of their backwards liberal ideas into the great state of Texas!

MeAlice on September 28, 2009 at 7:57 PM

Queen of Abortion

bluegrass on September 28, 2009 at 7:58 PM

Where the hell are all the pissed off govenors?

UNREPENTANT CONSERVATIVE CAPITOLIST on September 28, 2009 at 2:13 PM

- – - – - – - – - – - –

Most of the pissed off governors are guilty of being a part of the blame of their states being broke and they are standing in line to kiss the son of africas A$$ for some handouts and bailouts. If you don’t believe me ax Arnie.

bluegrass on September 28, 2009 at 8:03 PM

Here’s a link to Perry’s letter to Baucus re: the ‘State-shove’…

http://governor.state.tx.us/files/press-office/O-BaucusMax20090923.pdf

Yellowdog12 on September 28, 2009 at 4:52 PM

So, er, basically he says “pretty pwease, don’t make us accept ObamaCare.” weak, man, weak.

Firefly_76 on September 28, 2009 at 9:09 PM

All the more reason to repeal the 17th amendment and stop congressional unfunded mandates.

JIMV on September 29, 2009 at 11:05 AM