Side Effects: Cost Of Medicaid Expansion Going Nowhere But Up

Kathryn Nix / May 27, 2010

In passing Obamacare, Congress has put the states in quite a pickle. To sharply expand health coverage, Obamacare flung wide the gates of Medicaid eligibility. It envisions a massive expansion of the federal-state health program that, historically, delivers low-quality care to low-income Americans.

Not a smart move.

States were already struggling to meet their share of Medicaid program costs—even though Medicaid payments to providers often don’t even cover the cost of care. And, due to the inadequate reimbursement rates, more and more doctors were already refusing to accept new Medicaid patients.

How fiscally shaky is Medicaid today? Well, last year Congress used the stimulus bill to give states $87 billion to help them cover rising Medicaid costs. And that doesn’t seem to be enough.

A recent letter from House Democrats encourages their colleagues to give states another $24 billion to help them cover Medicaid costs for another six months. “Without this funding,” the letter says, “our states will be forced to make severe cuts to Medicaid providers and benefits, and the ensuing budget shortfall would have grave consequences for school funding and other essential state programs.” (more…)