The House Health Bill: A Welfare Spending Explosion

Dennis Smith / October 30, 2009

Members of Congress too often just forget: Medicaid is a welfare program. It is also one of the most poorly performing of all the federal welfare programs. Instead of doing anything innovative or imaginative to fix it, Members of Congress are intent on ramping up Medicaid spending and expanding it. Many currently uninsured Americans are going to be in for a rude surprise when they discover that they won’t be enrolling in superior private health plans, but rather Medicaid, courtesy of the U.S. Congress.

The Chief Actuary at the Centers for Medicare and Medicaid Services (CMS) provides insightful data about how the cost of health care will be shifted among the different sources of funding. In an analysis of the House bill (H.R. 3200), the earlier version of the most recent incarnation ( H.R. 3962) , CMS shows that Medicaid spending would surpass Medicare spending, and grow nearly twice as fast as spending in employer sponsored insurance. By 2019, one in five health care dollars will be spent through Medicaid. More than half of all health spending would flow through Medicare, Medicaid, or other public spending in 2019. See chart below. (more…)