The health care “reform” bills making their way through Congress would expand the number of people receiving government-funded medical coverage in two major ways. First, they would provide federal subsidies to individuals living at up to 400 percent of the federal poverty line for them to purchase private insurance plans on newly-created “exchanges.” Second, there would be a massive expansion of Medicaid eligibility – shifting 15 million more people onto Medicaid, according to the Congressional Budget Office.
This second component will have a major impact on state governments because Medicaid is funded, in part, by the states. In fact, this is the very reason why congressional leaders are using a Medicaid expansion to fulfill their vision of expanding government-funded health care. This strategy allows them to off-load the costs of a federal policy initiative onto hapless state governments. According to the Heritage Foundation, states would face a new $32.2 billion burden by 2019 under the Senate bill and of $60.1 billion in the same time frame under the House bill.
However, if states were to opt out of the Medicaid program entirely, they could realize a combined savings of $652 billion with no change in state spending on long-term care. (For North Carolina alone, it would be $21.2 billion.) Moreover, it’s possible that the final version of the health care “reform” bill would have no lower bound for eligibility for the federal subsidies – meaning that individuals currently on Medicaid could simply be shifted into the exchanges with Congress picking up the tab. In fact, under such a scenario, these individuals would likely have greater access to care because Medicaid’s low reimbursement rates often results in doctors turning away new Medicaid patients.
I recently proposed the idea of a Medicaid opt-out here in Nevada and the governor’s office has picked up on it. He has instructed the state Department of Health and Human Services to examine the feasibility of an opt-out. Legislation on the issue would likely be proposed in an upcoming special legislative session.
If Nevada opts out, I’d expect to see other states follow suit. Uncle Harry won’t be pleased.
