The Medicaid Expansion included in Obamacare may prove to be its Achilles Heel

Posted by PITHOCRATES - July 15th, 2012

Week in Review

Part of Obamacare includes an expansion of Medicaid.  The state’s health care programs for the poor.  As we know health care is very expensive.  Which has been the driving force behind Obamacare.  To cut these high costs.  And they’re going to do this by transferring a lot of these costs to the states.  Which has got them really nervous.  Because health care is very expensive (see Governors divided over Medicaid expansion by Michael A. Memoli posted 7/14/2012 on the Los Angeles Times).

America’s governors have long used their semiannual gatherings to lock arms in opposition to dreaded unfunded federal mandates and emphasize a pragmatic approach to problem-solving in stark contrast to a hyperpartisan, even dysfunctional Washington.

But the makings of a real divide loomed over the summer meeting of the National Governors Assn. here, as state leaders grappled with the fallout of the Supreme Court ruling that granted unexpected leeway with regard to a key component of President Obama’s landmark health law: whether to accept billions of federal dollars in return for expanding coverage for the poor through Medicaid…

But a greater number of governors on both sides approached the unexpected ruling with caution, largely out of concern for the long-term effect on state budgets that had been stretched to the brink by the economic downturn.

Through the Affordable Care Act, the government is set to spend an estimated $1 trillion over the next decade to help states insure Americans who make less than 138% of the poverty line, or about $15,400 annually, through an expansion of Medicaid. The provision was expected to extend coverage to about 17 million people, on top of the approximately 50 million Americans who are currently covered by the program…

But other governors are worried that already struggling states may be left in the lurch in the future.

It’s clear why these governors are wary about this Medicaid expansion.  An increase of Medicaid patients from 50 million to 67 million is an increase of 34%.  States are slashing other spending to cover their Medicaid spending.  As the Medicaid rolls are already overwhelming some states.  And the thought of increasing their Medicaid spending by 34% is making them very nervous.  For anything can happen in Washington.  Including the cutting of federal subsidies.  Which could leave some states with spending obligations they just won’t have the ability to pay.

Could this be part of some grander design?  Well, of course.  The proponents of Obamacare wanted a full-fledged taxpayer-financed national health care system.  Something the people vehemently rejected.  So they introduced a personal and an employer mandate to put the private insurers out of business.  More and more people will drop coverage because the fine will be cheaper to pay thus forcing insurers to raise premiums on the fewer remaining policy holders.  Which will encourage more people to drop their coverage.  And so on until the last private insurers shut their doors.  Leaving the federal government as the health care provider of last resort. 

The expansion of Medicaid will force states to spend more than they can afford to.  Requiring ever more federal assistance.  It will be just a matter of time until the federal government will have to step in and be the health care provider of last resort.  And before you know it they will have their full-fledged taxpayer-financed national health care system.  While the taxpayers stand in shocked disbelief wondering what just happened.  And muttering “government for the people my ass.”  Unless the states refuse this power grab by Washington.  And say ‘no’ to that federal money and not expand their Medicaid programs.  Perhaps making the Medicaid expansion the Achilles Heel of Obamacare.

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