In 2014, Obamacare’s key provisions will kick in, and among them is a huge expansion of Medicaid. Obamacare extends eligibility to almost everyone with income below 138 percent of the federal poverty level under the age of 65.
A report released by the Centers for Medicare and Medicaid Services shows the impact the expansion will have: “This expansion, together with greater participation by individuals eligible under current rules, is projected to add 14.9 million people to enrollment in 2014 and 25.9 million people by 2020—26 percent and 44 percent, respectively, compared to pre-[Obamacare] estimates.”
This means that by 2020, Medicaid enrollment will reach 85 million, or approximately one in four Americans. This level of dependence distorts the original purpose of the government program, which was intended to serve as a safety net for only the most vulnerable.
As a result of the expansion, the report shows, Medicaid spending between 2011 and 2020 will increase under Obamacare by $619 billion. The federal government will initially pay for most of the new spending, totaling $572 billion. But the expansion will increasingly strain state budgets as well, since the federal contribution decreases overtime. The Medicaid expansion will bring total state Medicaid spending to $2.3 trillion through 2020.
As Heritage’s Nina Owcharenko points out in testimony before Congress, “Unlike the federal government, practically all states are required to balance their budgets. Therefore, states must find ways to meet their budgets.” The enormous amount of Medicaid mandatory spending will force states to limit funding for other priorities like education, transportation, and law enforcement.
To top it off, Medicaid is a broken program, and expanding it will only exacerbate the problems it already causes for current beneficiaries. Several studies show that, as a result of very low provider reimbursement rates, Medicaid beneficiaries have trouble accessing physicians. When compared to the privately insured, Medicaid patients face longer wait times and worse outcomes. As one recent study concluded, Medicaid recipients “were affected by more barriers to timely primary care and had higher associated [emergency department] utilization. Expansion of Medicaid eligibility alone may not be sufficient to improve health care access.”
Obamacare’s Medicaid expansion worsens an already dire situation while straining federal and state budgets. To read the Heritage reform proposal that would make Medicaid affordable while also improving the program for patients, click here.