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Obamacare's 'Giveaway' Is Anything But Free

February 10, 2013 in Uncategorized

By Michael D. Tanner

Michael D. Tanner

If a deal sounds too good to be true it usually is. That’s a
maxim that Gov. Scott Walker and Wisconsin legislators should keep
in mind as they wrestle with the question of whether to expand the
state’s Medicaid program in conjunction with the Patient Protection
and Affordable Care Act, a.k.a. Obamacare.

Obamacare originally required every state to expand eligibility
for Medicaid to 138% of the poverty line, or roughly $32,500 per
year for a family of four. The expansion would also make childless
single men, a notoriously high-cost group, eligible for Medicaid
for the first time in every state (although Wisconsin already
covers this group through Badger Care Plus). Not surprisingly, many
states balked, and last summer the Supreme Court ruled 7-2 that the
federal government could not force states to expand their
programs.

Now, like a late-night television huckster with a set of Ginzu
knives, the federal government is dangling “free” money in front of
state lawmakers as an incentive for them to go along. For the first
three years, the federal government promises to pay 100% of cost of
the expansion. This 100% funding will gradually decline to 95% in
2017, 94% in 2018, 93% in 2019, and 90% in 2020 and thereafter.
Given that the federal government only provides 59.74% of the
funding for Wisconsin’s current Medicaid program, this sounds like
a very good deal.

Going along with
this massive Medicaid expansion will end up hurting taxpayers,
providers, and patients.”

But as good as it sounds, Wisconsin should resist the
temptation.

First, there is no such thing as free money. Wisconsinites pay
federal taxes too. Those federal funds are just being recycled.
More importantly, even with the federal government picking up 90%
of the cost, Wisconsin taxpayers are not completely off the hook
for state taxes. Ten percent of a very big number is still a very
big number. In fact, by 2022, it is estimated the Medicaid
expansion will cost Wisconsin taxpayers $200 million.

However, those estimates significantly underestimate the cost to
Wisconsin if it goes forward with the expansion. It ignores a
second category of recipients likely to be added to the Medicaid
rolls if this expansion moves forward, what the Robert Wood Johnson
Foundation has dubbed “the woodwork effect.”

As the Medicaid expansion moves forward, with all its attendant
outreach and publicity, thousands of Wisconsin residents will
discover that they are currently eligible for Medicaid. Some of
these people will be uninsured today, but others will either be
paying for insurance themselves today or receiving it from their
employer. Now, they will be more likely to sign up for Medicaid. In
fact, …read more
Source: OP-EDS  

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