01 Dec 2009 Health Care Bombshell: ObamaCare Would Doom Medicaid

Writing for the Heritage Foundation, Dennis Smith and Ed Haislmaier have today exposed a huge political drawback to the liberal health care bill: ObamaCare — without intending to — could, almost certainly would, be the death knell of Medicaid, America’s health care safety net for the poor.

Smith and Haislmaier convincingly demonstrate that the states can’t afford Medicaid under an ObamaCare regime — costs to the states would reach $725 billion over the 2013-2019 period alone. What’s more, staying in Medicaid under ObamaCare effectively puts the federal government in charge of about a quarter of each state’s budget, and every state except North Dakota would come out better financially by abandoning Medicaid.

Fiscally and logically, withdrawing from Medicaid would be a no-brainer for the states. It could even be seen as a compassionate choice, as ObamaCare provides subsidies to help low-income people buy health insurance unless they receive Medicaid. So, a state legislature or governor could reason, why not get rid of the burdensome, unaffordable and — let’s be frank, substandard — Medicaid program? The poor of my state will still get help with their health care bills, because Washington D.C. will provide it!

The Heritage paper explains all this in far greater detail, and it is a must-read for anyone following the health care debate. (The paper is quite readable for people who aren’t health care wonks, by the way.) If the mainstream media has any competence at all (I doubt it very strongly), it will cover this heavily, as the repercussions are immense.

A closing thought (from me): When Barack Obama was running for president, I don’t recall him promising an end to Medicaid and steep cuts in Medicare, but if he gets ObamaCare through, it looks like that’s what he’ll be delivering. Surprise!

Full disclosure: Ed Haislmaier is a member of the National Center for Public Policy Research’s board of directors.

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Labels: Conservatives, Government Health Care, Government Power, Government Spending, Health Care, White House