A Budget Crisis in Three Parts: How ObamaCare is Bankrupting Taxpayers

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Background:

Under ObamaCare, states have the option to expand Medicaid to a new class of able-bodied, working-age adults. Given that the safety net was originally designed to serve the truly needy, this population was previously ineligible for long-term welfare. ObamaCare changed that, creating a new group of able-bodied adult enrollees to directly compete with the truly needy for limited resources.

By 2016, 31 states and the District of Columbia had adopted the expansion. Although expansion was fully funded by federal taxpayers for the first three years—with the exception of some administrative costs which were borne by states—the federal share of these costs began to ratchet down in 2017.

By 2020, states will pay at least 10 percent of expansion costs, although Congress continues to pursue ways to reduce or even eliminate federal spending on ObamaCare expansion.

While states have yet to feel the full impact, policymakers are faced with a large, imminent problem: they do not have the money. Now, they are witnessing an explosion in both enrollment and costs which puts funding for the truly needy and other critical priorities in jeopardy.

Key Findings:

  1. Pre-ObamaCare, total Medicaid spending had already more than doubled since 2000, with states spending one out of every four dollars on Medicaid.
  2. States that expanded ObamaCare have signed up more than twice as many able-bodied adults as promised.
  3. ObamaCare expansion per-person costs have exceeded original estimates by 76 percent.
  4. This enrollment explosion, combined with higher per-person costs, has led to cost overruns of 157 percent.
  5. Policymakers in the states and in Washington, D.C. need to work together to roll back existing expansions and stop new ones.

Bottom Line: ObamaCare expansion is costing taxpayers billions and fueling budget crises across the country. Its days should be numbered.