Obamacare Harms State Finances, Imposes Unfunded Mandates, Drives Up State Budget Deficits; Even Democrats Criticize Provisions
While public attention has focused on Obamacare’s unconstitutional “individual mandate,” challenged yesterday in oral arguments at the Supreme Court, other parts of the health care law are more worrisome to governors facing massive state budget deficits that will be aggravated by Obamacare.
As the National Governors Association noted in its Fall 2011 “Fiscal Survey Of States,” “state spending on Medicaid is likely to continue to see above average growth due to… the implementation of the Affordable Care Act.” (Obamacare is known as the “Affordable Care Act” or PPACA.) A congressional report, “Medicaid Expansion In The New Health Law: Costs To The States,” “conservatively estimates that PPACA will cost state taxpayers at least $118.04 billion through 2023.”
Even Democratic governors call its impact “devastating,” saying things like “I have no idea how we’re going to pay for it.” Gov. Steve Beshear (D-Ky.) notes that “starting in 2016, Washington will begin shifting that additional costs to the states. ‘I have no idea how we’re going to pay for it,’ Beshear said candidly.” (Editorial, “Medicaid Expansion Will Cost Taxpayers,” The Paducah Sun, Feb. 13, 2011). Gov. Brian Schweitzer (D-Mont.) laments that “I’m going to have to double my patient load and run the risk of bankrupting Montana.” (“Montana Looks North For Health Care That Works ,” Yes Magazine, Oct. 21, 2011.) “In 2014, when the PPACA kicks in, many of the uninsured will be given the opportunity to enroll in Medicaid. With this change, Schweitzer expects the state’s Medicaid population to double, creating a huge financial burden on the state of Montana under the current health care system.” “The governor told Marguerite Salazar, a regional director of the Department of Health and Human Services, that Congress has designed a ‘pack of crap’ that gives away far too much” to special interests. California Governor Jerry Brown says, “We will be further disadvantaged under the Medicaid expansions mandated under the Affordable Care Act … proposals to shift several billion dollars in Medicaid costs to California would be devastating and would clearly move us in the wrong direction.” (Gov. Jerry Brown, Letter To President Obama, June 27, 2011)
Obamacare will also cost federal taxpayers much more than Obama claimed, as recent Congressional Budget Office (CBO) projections illustrate. The CBO has repeatedly had to increase its cost estimate for Obamacare as more and more assumptions behind Obamacare’s ridiculously low $900 billion price tag have turned out to be false. Thus, Obamacare will increase the federal budget deficit, rather than reducing it slightly as Obama had claimed it would. It will increase the deficit despite the fact that Obamacare imposes a host of new taxes and fees, mostly starting in 2013. Obamacare taxes medical devices and cosmetic surgery, arbitrarily discriminates against certain hospitals, and raises taxes starting in 2013 on investors.
Earlier, I filed an amicus brief on behalf of state legislators explaining why key Obamacare provisions are unconstitutional under the Tenth Amendment and exceed Congress’s power under the Commerce Clause.
Obamacare is causing layoffs in the medical device industry, is discouraging some employers from hiring, and is reducing capital investment. It is harmful to the economy, medical innovation, and the healthcare system. Earlier, I discussed some of the bad effects of Obamacare on patients, employers, consumers, and the insurance market.