Obamacare’s Impact on the States

Brian Blase / July 02, 2010

State legislators and governors will face many challenges implementing the provisions of Obamacare. In a new Heritage Foundation study, Ed Haislmaier and I analyze the components of Obamacare that detrimentally affect states and make recommendations for how states should respond to the new law.

Of the many impacts on states that we analyze, there are three key ones:

1) The Massive Medicaid Expansion
Over half of the newly insured will gain coverage through an expansion of state Medicaid programs. Medicaid expansion presents numerous problems for the states: additional financial obligations and taxes, issues of access for the increased demand on the state health care system, the creation of a new “doc fix” for Medicaid, reduced Disproportionate Share Hospital payments, and maintenance-of-effort requirements that limit state flexibility.

2) The Federal Usurpation of State Authority
States will be forced to contend with the usurpation of their longstanding authority in regulating private insurance. The Secretary of Health and Human Services is given enormous power to regulate health insurance to his or her specifications. (more…)