Repeal is Not Enough: How States Can Survive the Impending Medicaid Crisis

Conn Carroll / March 04, 2011

Mark your calendars for July 1st. That is the day that Obamacare’s failed health care model will crash head on to the fiscal reality of strained states budgets. For all the headlines that Obamacare’s individual and business mandates get, perhaps the dirtiest little secret about Obamacare is that over half of the health insurance coverage gained through the law is accomplished through Medicaid.

Medicaid already covers one of every six Americans, eats up 22 percent of the typical state budget, and total federal and state Medicaid spending has quintupled over the past two decades. States have been able to prolong the day of reckoning thanks to more than $100 billion of federal “stimulus” poured into state budgets, but that ends July 1. Worse, Obamacare has added strict “maintenance-of-effort” eligibility requirements that are preventing states from reforming their Medicaid programs to keep them from busting their budgets. All 29 Republican governors signed a letter to Congress and the White House asking that the Medicaid maintenance-of-effort requirements for eligibility in the new health care law be repealed. But as Heritage analyst Brian Blase explains, repeal is not enough: (more…)