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Reason Foundation

Cash-Strapped States Wary of Medicaid Expansion

Leonard Gilroy
October 5, 2009, 2:28pm

Following up on Friday's post, Shailagh Murray at the Washington Post has an interesting story today on the growing apprehension among the states over the prospects for a dramatic expansion of Medicaid at a time when most states can ill-afford it:
The nation's governors are emerging as a formidable lobbying force as health-care reform moves through Congress and states overburdened by the recession brace for the daunting prospect of providing coverage to millions of low-income residents.

The legislation the Senate Finance Committee is expected to approve this week calls for the biggest expansion of Medicaid since its creation in 1965. Under the Senate bill and a similar House proposal, a patchwork state-federal insurance program targeted mainly at children, pregnant women and disabled people would effectively become a Medicare for the poor, a health-care safety net for all people with an annual income below $14,404.

Whether Medicaid can absorb a huge influx of beneficiaries is a matter of grave concern to many governors, who have cut low-income health benefits -- along with school funding, prison construction, state jobs and just about everything else -- to cope with the most severe economic downturn in decades.

"I can't think of a worse time for this bill to be coming," said Tennessee Gov. Phil Bredesen (D), a member of the National Governors Association's health-care task force. "I'd love to see it happen. But nobody's going to put their state into bankruptcy or their education system in the tank for it."
Read the whole thing. My fear is that while states and the feds kick the ball back and forth in terms of who would be responsible for covering the costs of Medicaid expansion, the public discourse will gloss over the fact that it's us taxpayers that would ultimately foot the bill either way, whether that comes through higher taxes and fees at the state level or federal level (or both).

Leonard Gilroy is Director of Government Reform


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