Letter: Medicaid expansion is bad for taxpayers and patients
Medicaid expansion became voluntary for states after the Supreme Court's 2012 ruling. The federal government pays 100 percent of the total costs through 2016, then the federal contribution declines to 90 percent by 2020 and stays at 90 percent after that. Several Democrat and Republican governors supporting Medicaid expansion condition their support on federal funding remaining untouched. In essence, pro-expansion governors are telling Washington, "don't touch entitlement spending." This reliance on federal revenues exacerbates the country's fiscal challenges and affects states' own fiscal health.
Federal funds that pay for state Medicaid programs are raised through federal general revenue collection — taxes paid by residents in all states.
On Nov. 25, 2008, a new federal rule was passed that allows states to charge premiums and higher co-payments to Medicaid participants. This will enable states to take in greater revenues, limiting financial losses associated with the program. Estimates figure states will save $1.1 billion while the federal government will save nearly $1.4 billion. However, this means that the burden of financial responsibility will be placed on 13 million Medicaid recipients who will face a $1.3 billion increase in co-payments over five years. The major concern is that this rule will create a disincentive for low-income people to seek healthcare thus forcing only the sickest participants to pay the increased premiums. It is unclear what long-term effect this will have on the program.
Medicaid is already spread too thin. Adding a new and complex population to this program does not solve its challenges; it only makes them worse. States should resist, and Congress should remove, this temptation. Both should begin to lay out a better and more sustainable alternative than a failing government health program to care for the less fortunate.
Nina Owcharenko, Director of the Center for Health Policy Studies and Preston A. Wells, Jr., Fellow at The Heritage Foundation suggests that instead of using a flawed Obamacare model, states should put in place an alternative. States should develop a state solution tailored to the specific needs of this new population rather than placing them in a one-size-fits-all Medicaid option.