by Keli CarenderShonda Werry | March 26, 2012


Individuals and state governments across the nation are in the process of trying to figure out how the Patient Protection and Affordable Care Act (PPACA, a.k.a. “ObamaCare”) will affect them once it is fully implemented. When then-Speaker of the House Nancy Pelosi stated, “…we had to pass the bill to find out what was in it,” she wasn’t lying. The provisions of the law are just now slowly coming to light, even thought it was signed into law in March of 2010, and that does not even include the rules that have yet to be written by the Department of Health and Human Services.

Most everyone would agree that there were certain components of the health care system that were broken, or at least inefficient, before the PPACA became the law of the land. However, where President Obama and Speaker Pelosi saw an opportunity to further centralize the system within the bowels of the federal government, others saw an opportunity to move away from the failed model of the existing, already too-centralized system.Pills_Facebook

Over the last few decades, the federal government has taken over more and more of the health care system in the U.S., now culminating in an almost complete takeover with the PPACA. With each step taken, the system became more expensive, less efficient, and the decision-making power moved further and further away from individuals and families. With health care decisions among the most important and personal choices a person will ever make, many Americans felt that additional centralization of the health care system would only serve to exacerbate the existing problems.

State governments will find themselves in a particularly tough spot because much of the cost of the new law will be imposed on the states. One of President Obama’s most forceful arguments for supporting his law was that it would cut costs and not increase the deficit. He was able to make that argument with a straight face because much of the cost (though not all) will be levied on the states. With so many states in dire financial situations of their own, burdening state residents with more federal health care mandates might push states over the edge into complete collapse.

Here’s an overview of how some states will be impacted by the new health care law’s expansion of Medicaid.

Florida’s Agency for Health Care Administration predicts that the Patient Protection and Affordable Care Act will cause the state to experience a $1.1 billion increase in Medicaid expenses in 2017 alone.

Indiana estimates that the between 388,000 and 522,000 new enrollees will apply for benefits under the state’s Medicaid program with almost half of these enrollees (248,000) moving over to Medicaid after dropping out of their prior (mostly private sector insurance) to receive taxpayer-funded healthcare. Providing this expanded coverage will cost an additional $2.59 billion to $3.11 billion over a 7-year period.

Milliman, Inc., which performed an outside analysis for the State of Mississippi on the costs for the expanded Medicaid program, estimates that Mississippi will add between 206,000 and 415,000 people to its Medicaid rolls due to the Patient Protection and Affordable Care Act. The cost of this expansion will be more than $2.59 billion over 10 years.

The new federal health care law will result in nearly 20% of all Nebraskans being covered by Medicaid.

The cost for Nevada’s Medicaid program is expected to increase by nearly 50% by 2020 because of the Patient Protection and Affordable Care Act.

According to one study from the Buckeye Institute, Medicaid expansion under PPACA will bankrupt the state in the next decade. A family of four in Ohio currently pays nearly $2,000 in taxes each year to finance the state’s Medicaid program. The new healthcare law dramatically increases that burden for Ohio taxpayers.

In Texas, the state government has concluded that the new federal healthcare law could add up to an additional 2,000,000 new people to the Texas Medicaid program, which would cost state taxpayers nearly $27 billion over the coming decade. In light of these startling facts, Texas Governor Rick Perry (R) is currently investigating the possibility of withdrawing his state from the federal Medicaid program, and instead putting in place a more efficient program that Texas would administer and oversee.

A study by the Washington Policy Center says that the State of Washington is facing a decision to either opt out of Medicaid or eliminate its state-based healthcare programs for low-income residents.

This Medicaid expansion even threatens Wyoming, which is one of the most fiscally responsible states in the United States. The state recently conducted a study on the burden of expanding Medicaid, which concluded that Wyoming will have to consider dropping out of Medicaid. Wyoming is in a particularly vulnerable position because the PPACA provides for even more Medicaid funding for “frontier states” (including Wyoming). This funding declines precipitously after 5 years, leaving the frontier states to shoulder all of the new costs associated with the ObamaCare programs that are being implemented in the state.

Even before the new healthcare law was enacted in 2010, most states were struggling to afford their Medicaid expenses. The new law’s Medicaid expansion only accelerates the states’ budget crises.

The only real way to reform our health care system in a way that will lower costs and increase access is to bring the decision-making power back to the state governments, where citizens have more influence and power over legislation.

But how could that even be accomplished?

There are many theories about how to do this, but there is one method in particular that stands above the rest: The Health Care Compact (HCC). The HCC is an interstate compact – which is really just “an agreement between two or more states that is consented to by Congress” – that would return the authority and the responsibility to regulate health care back to the member states (except for military and tribal health care). The funding would basically come in the form of block grants from the federal government, with no mandates, and no strings attached. The people of each member state would finally have the power to decide what kind of health care system they want in their own state. The Health Care Compact is silent on policy, and with good reason. The current problem is that Washington DC has control of our health care, and that decision-making power needs to move closer to the people.

The HCC is not health care reform. It is governance reform. It is about making sure that bureaucrats and politicians in Washington DC no longer have the power to make our health care decisions for us. The HCC would remove the ability of lobbyists to focus on one city, on one level of government, to influence legislation. Keep in mind, the regulatory decisions could be even further devolved down to the local level, or all the way down to individuals and families, which is where it really should reside. But that will never happen as long as bureaucrats, politicians, and lobbyists maintain control in Washington DC.

And while state legislatures are not beacons of virtue either, they are closer to the people, and citizens have vastly more influence on state policy than they do on federal policy. Once health care decision-making power is devolved to the state, it is up to each citizen to engage in the political process within his or her state, to ensure that the state legislature does not violate the rights of the residents.

It may result in more work for us, the citizens, but who wouldn’t put in a little extra work if it meant making your own health care decisions?

This article was originally published by State Budget Solutions and has been republished by Federalism in Action.


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