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Reckless Medicaid Expansion vs. Responsible Medicaid Reform

3:48 PM, May 19, 2011 • By JEFFREY H. ANDERSON
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When President Obama tours the country and touts Obamacare, one thing you never hear him highlight is that half of Obamacare’s projected decrease in the number of uninsured comes from people who would simply be dumped into Medicaid at taxpayer expense. Of the 32 million people that the Congressional Budget Office says would gain insurance under Obamacare (a demonstrably false number in the first place), fully half — 16 million — would simply be added to the Medicaid rolls (see Table 4). According to the CBO’s projections, the cost of this massive Medicaid expansion would be nearly $1 trillion over Obamacare’s real first decade (2014 to 2023). 

Obama SOTU

Rather than increasing Medicaid spending dramatically (a key reason why the CBO says Obama’s 10-year budget would increase the national debt from $14 trillion to $28 trillion) Republicans have proposed giving states a specified amount of federal Medicaid funding that they could then use to tailor their Medicaid programs to the specific needs of their residents — something that governors have long been requesting. By adopting this approach, the Paul Ryan-authored House Republican budget would save $201 million a day on Medicaid spending in relation to Obama’s budget.  

Today, Senators Tom Coburn (R., Okla.), Richard Burr (R., N.C.), and Saxby Chambliss (R., Ga.) introduced legislation that would adopt a similar approach.  Their bill would (like Ryan’s budget) repeal Obamacare, and it would give states a specified allotment of federal funding to cover the costs of the majority of the Medicaid program. This legislation would continue the current funding formula for acute medical care for those Medicaid patients who are seniors or who are disabled.

As Coburn has previously noted, Obama declared near the start of the Obamacare debate that “it is not sufficient for us simply to add more people to Medicare or Medicaid to increase the rolls, to increase coverage in the absence of cost controls and reform.... We can’t simply put more people into a broken system that doesn’t work.”  

Since then, Obama has of course forced through an extremely unpopular health care overhaul that would dramatically expand Medicaid’s rolls and its costs, while also ushering in a massive new entitlement. Obamacare’s only real cost controls would be imposed on Medicare — not Medicaid — by a largely unchecked and clearly unconstitutional Independent Payment Advisory Board (IPAB)

IPAB’s dictates would not only have the force of law but would actually tie the hands of future Congresses, which would be powerless to overrule IPAB’s decrees even with a majority vote in both houses of Congress and the president’s signature. (Overruling IPAB would require supermajority votes.) 

While the president turns a blind eye to the Constitution and the national debt, and a deaf ear to the American people, Republicans are advancing serious proposals to lower Medicare and Medicaid costs — through increased flexibility in Medicaid, and increased competition and choice in Medicare. Meanwhile, President Obama has offered a budget that would increase deficits by more than $1 billion a day in relation to the Ryan-authored House budget.

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