Why the Court's ObamaCare decision might dramatically increase the deficit

However, now that states can opt out of the law’s Medicaid expansion, states that currently cover people above 100 percent of FPL with Medicaid now have a significant financial incentive to shrink Medicaid eligibility down to 100 percent of FPL, and let the federal government (read: taxpayers in other states) pay for the rest.

This, again, will lead to substantially higher costs for the federal government, because exchange subsidies are much more generous than Medicaid is.

A countervailing aspect to the ruling is that, for the 23-24 states that have minimal Medicaid programs, many people below 100 percent of FPL may not get any insurance coverage at all, and the federal government pays for the majority of that spending under the Affordable Care Act.

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