The Democrats’ Ticking Time Bomb
Tuesday, November 24th, 2009Democrats face a ticking time bomb in the form of increased state taxes if Medicaid coverage is expanded. If either the House or Senate bills are signed into law, states will face what I’ve called the ‘mother of all unfunded mandates’:
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.
Dick Morris’ article tells a more complete story of what’s likely to happen:
The House bill requires states to give Medicaid to those whose incomes are less than 150 percent of the poverty level, while the Senate will settle for only 125 percent. For most states, this is a hefty increase.
In some states, like New York, where Medicaid covers everyone making 150 percent of the poverty level already, there will not be any extra required spending.
But not so in California, which only covers 100 percent of the poverty level. Were the House bill to pass, the already fiscally beleaguered state would have to increase its Medicaid spending on poor people by 50 percent, at least an extra $2 billion a year and perhaps more. (more…)