Thursday, March 31, 2011

Medicaid and the States

Medicaid is a federal-level United States health care program for families and individuals with low income. It is jointly funded by the individual states and the federal government. Management of the program falls to the states with federal edicts governing their conduct.

Under Obamacare, state Medicaid spending is charted to go through the roof. Obamacare uses Medicaid to pad the books on the number of Americans that gain coverage. Under Obamacare, nearly half of the Americans to gain coverage do so through a huge expansion in Medicaid. The greatest portion of this unfunded mandate will fall to the states and their state taxpayers to make up the difference.

Unlike the federal government, states cannot simply print money to cover their debts or go into a structural deficit like that. This is especially true where a state, like Pennsylvania, has to pass a balanced budget.

Under Republican Governor Tom Corbett’s budget proposal, nearly half is already consumed with Health and Human Services (over $30 billion of the $63 billion budget) costs.

Medicaid was in trouble before Obamacare. With the expansion of this unfunded federal mandate, it will only get worse.

One solution to save Medicaid was to repeal Obamacare. The Republicans in the House of Representatives attempted that in a series of bills during their first few days in office. Senate Democrats obstructed the repeal of Obamacare and proposed no solution to the problems with Medicare, they merely said “NO!”

Realizing that the Democrats will stop any attempt at repealing Obamacare in the Senate, the Republicans now must find solutions to save the budgets of the states.

One such solution is being proposed by Republican Congressman Paul Ryan. Ryan plans to unveil a plan that will preserve the existing Medicare program for those currently enrolled. His proposal will also preserve the program as is for those that will become eligible in the next 10 years. His solution fully funds Medical Savings Accounts for low-income beneficiaries and allows everyone else to set up and fund tax-free accounts for themselves. His plan modernizes and strengthens Medicaid by reforming high-risk pools and gives the various states the right to use their individual program as they believe best fits their population.

The Democrats have not proposed a serious solution to the Medicaid problem. So far, they have only exacerbated the problem with the passage of Obamacare and their unwillingness to reform it. Passing the bill on to the taxpayers of the various states is not an acceptable solution. If they oppose Ryan’s plan, they should simultaneously offer a solution of their own.

Absent an alternative solution to fix Medicaid, Congress should act to pass Ryan’s plan.

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