First came the threat. Then the bribe, or the offer that sounds
almost too good to be true. Now it is the moment of truth.
On June 28, U.S. Supreme Court Chief Justice John Roberts
rendered the majority opinion in a 5-4 vote upholding the
constitutionality of the Affordable Care Act. However, with a 7-2
margin, the Court struck down a key part of the law that would have
stopped the flow of all federal funds for Medicaid to
states that did not expand access to this program, as the law
intended. Since the federal government puts up the bulk of the
money in this joint federal/state program, states that chose to opt
out of the expansion would have faced a massive and essentially
mandatory increase in their Medicaid costs if this part of the law
had been upheld in its original form.
“The financial ‘inducement’ Congress has chosen is much more
than ‘relatively mild encouragement’ to expand Medicaid,” Roberts
wrote. “It is a gun to the head.”
Unable to coerce state governments to spend more of their tax
money on Medicaid, the federal government offers a grace period of
several years in which it will pick up essentially all of the cost
of the Medicaid expansion, scheduled to begin in 2014, if
individual states commit to spending money of their own in years to
follow.
Over a 10-year period, Missouri — my home state — would need
to commit to spending about $430 million in order to qualify for
$8.4 billion in additional Medicaid grants from the federal
government. If that looks and sounds almost too good to be true, it
is because it literally is too good to be true.
Where is the money supposed to come from to pay for a huge
increase in this entitlement program, which is intended to add some
17 million people nationwide to the Medicaid rolls? Do we just
pretend that the money is there when we know very well that it is
not?
Many state governments, including Missouri, are already
over-leveraged. They cannot commit to spend large additional sums
of money on Medicaid without slashing spending in other areas, such
as education.
Meanwhile, the federal government — with a string of
trillion-dollar deficits — is now borrowing about 40 cents for
every dollar it spends. Imagine adding $400 of credit card debt for
every $1,000 you spend. How long do you think that would work?
In short, the states are being asked to participate in a Bernie
Madoff kind of scheme. They are being asked to commit to spend
large sums of money, which they don’t have, in order to receive
money from the federal government, which it doesn’t have, while
making an unsustainable set of promises to people at both the state
and federal levels.
Nebraska Gov. Dave Heineman and Iowa Gov. Terry Branstad are
already on record opposing the Medicaid expansion. Let us hope that
Missouri and other states join them in opting out of this part of
the federal health care plan.
It is easy to write IOUs. As Bernie Madoff did, you can — for a
while anyway — write new IOUs to replace old IOUs. But it is
morally as well as fiscally reprehensible to make promises that you
cannot keep. That is why the states should say “No” to the Medicaid
expansion plan.
