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Ellison Barber: Obamacare’s Swollen Medicaid Rolls Threaten State Budgets

Barber warns surge in medicaid enrollment may backfire on state budgets

• November 1, 2013 9:59 pm

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The Washington Free Beacon's Ellison Barber warned Obamacare's medicaid expansion may ultimately backfire on state budgets across the country Friday on The Kelly File.

Host Megyn Kelly cited medicaid enrollment figures which are thus far outstripping enrollment in the Obamacare exchanges.

The danger with this, Barber said, is that healthy people who would otherwise drive down costs at the traditional exchanges are factored out of the insurance market completely. Thus, prices at the traditional healthcare exchanges will increase.

Moreover, according to Barber, states have not budgeted for the increased costs associated with all of the new medicaid enrollees. Although the federal government will cover the expansion initially, come 2017 the states who have accepted the expanded entitlement will incur increased medicaid expenses. This could compel states to cut spending or raise taxes to cover the new costs, Barber pointed out:

MEGYN KELLY: They say, look, these folks who are rushing onto these medicaid rolls were already going to the hospital, they were getting sick, running up our bill. So that was already something we already were having to pay for. Now it's just out in the open. The numbers of them and who they are, and the system is working exactly as they expected it to work.

ELLISON BARBER: Sure, I think a lot of states would disagree with that though because I think there are a lot of states that are worried about in terms of the finances of this. Or they haven't budgeted for having all these extra millions of people in every single state. And states are a little bit different, the thing to remember about states is states are different from the federal government. Every state except Vermont has a balanced budget provision either in their state constitution or state statute. So for Georgia, for example, there is a balanced budget amendment written into the constitution. They cannot expand spending, even if they want to. So to have to care for all these people on medicaid now, when they haven't planned for it in their budget,  they're either going to have to raise taxes, raise income payroll taxes or cut things for other spending, like for roads, schools and things like that. There are a lot bigger problems that go with it. It's one of those ideas that sounds nice, to be like there are a lot of people who still need insurance so let's expand it to help people get on for free who can't pay for it. But there are real costs that come with it. And it's taxpayers — even in the states like we talked about the other day, 26 states signed up for this. But it's federal money that is paying for the newly eligible people, that's everyone, if it's not in your state you're still paying.

Published under: Medicaid, Obamacare