Many states across the country are facing budget troubles right now. With a stagnant economy, rising costs for infrastructure maintenance and ballooning entitlement costs, state capitals from sea to shining sea are dealing with challenging budgetary pictures. Some states are making their strained situations even worse by entering the budgetary vortex of Medicaid expansion.
From California to Rhode Island, states are confronting new concerns that their Medicaid costs will rise as a result of the federal health care law.
In California, Democratic Gov. Jerry Brown’s recent budget projected an additional $1.2 billion spending on Medi-Cal, the state’s version of Medicaid, due in part to surging numbers. State officials say about 300,000 more already-eligible Californians are expected to enroll than was estimated last fall.
“Our policy goal is to get people covered, so in that sense it’s a success,” said state legislator Richard Pan, a Democrat who heads the California State Assembly’s health committee.
However, as Mr. Pan is learning, California is no Neverland, devoid of responsibilities and free from consequences. California, and the 25 other states that are expanding Medicaid under ObamaCare, will have to come up with the money to cover the massive new costs that come from the President’s controversial health care law.
Much of the cost comes from the increased enrollments to traditional Medicaid, the portion of the program where the states have to pick up a larger portion of the costs than they do for the expansion enrollees. This is the so called “woodwork effect” that we have talked about several times before. States like California, Rhode Island and Washington now face tough choices as the woodwork numbers are higher than anticipated.
In Rhode Island, Dierdre Gifford, the state’s Medicaid director, told the Associated Press that The Ocean State signed up 6,000 more people than it had projected. California and Washington State face similar problems. Washington had 165,000 of its citizens joined the ranks of old Medicaid after the expansion. The federal government only picks up roughly 60 percent of the tab, much less than the payment formula for the new expansion enrollees.
“Anyone who didn’t budget for this is going to be behind the eight ball,” Avalere CEO Dan Mendelson said. “It’s the kind of thing governors will want to discuss with the White House.”
The governors in Rhode Island, Washington State and California all supported ObamaCare, as did many of the the other governors who have decided to expand Medicaid in their state, but now face the reality of paying for the policy they fought for during the debate in Washington in 2009. It’s a reality that their citizens will have to pay for, whether they supported the law or not, and a reality that now has very real political consequences for these governors and state legislators.
Josh Archambault has detailed how Arkansas, one of the states expanding their Medicaid program, is facing a budget “vortex of uncertainty” in the future. Their expansion program will certainly have a detrimental impact on the Arkansas state budget and its citizen’s pocket books, just how bad is still to be determined.
We have chronicled the many problems faced by patients in this new health care environment – the reduced access to care, the increased monthly costs, and the bleak future they face in their states. Whether it’s Arkansas, California, Rhode Island or one of the many other states joining the Medicaid expansion program, one has to wonder if these leaders are ready to deal with the harsh repercussions of their love for Obamacare?