Democrats’ Medicaid time bomb for the states

When congressional Democrats meet behind closed doors to reconcile conflicting provisions in the House and Senate health care bills, they’re unlikely to revisit areas on which the two chambers already agree, such as mandatory expansion of Medicaid. But this ticking fiscal time bomb poses a direct threat to the solvency of the states.

The bills “would force more people who are currently eligible for Medicaid to enroll, and the states (except Nebraska, thanks to Sen. Ben Nelson’s special deal) would be left to pick up the tab without any additional federal funding,” says Dennis Smith, senior fellow at the Heritage Foundation’s Center for Health Policy Studies.

Besides enrolling up to 20 million more people in Medicaid with promises of additional federal aid, Smith adds, both health care bills contain a “maintenance of effort” provision that prevents cash-strapped states from tightening Medicaid eligibility requirements.

So states will be forced to expand Medicaid coverage at the expense of virtually everything else in their budgets – including education, public safety, transportation and welfare – even if their duly elected legislators would prefer to spend the money elsewhere.

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