Senate, tread lightly – as states reach their maximum healthcare cost capacity
A recent push by Senate Democrats in support of the government reform effort is to step away from the public option as proposed and put more emphasis on expanding programs like Medicare and Medicaid, by adjusting enrollment requirements and making benefits available to more people. Supporters of this plan claim such a move would be cost neutral, although it further burdens the states’ already unstable financial standing.
An article released by the Heritage Foundation talks about one outcome that is largely being overlooked by the Senate leadership – states opting out all together. Yes, according to Heritage if the states were to drop Medicaid it would save them over $1 trillion – as Medicaid accounts for about 1/5 of total state spending. North Carolina could save $23.4 billion in 6 years.
State participation in Medicaid is completely voluntary, meaning states can opt out at any time. That’s one scenario the Senate is unwilling to consider in their cost estimates. Even though it would, in fact, debunk all CBO and OMB cost projections for the health care overhaul and result in an unsustainable cost burden far exceeding all estimations. As ARRA funds are quickly depleted and program costs continue to increase, such a move might not be such a far out assumption, it could in fact even be described as the rational choice for states – however, good luck to the taxpayers!