December 7, 2012

On the Proposed Medicaid Expansion

As our readers know, last Thursday, Missouri Gov. Jay Nixon announced his support for an expansion of Missouri’s Medicaid program. It is a  move that, if adopted next year, would take the state a step closer to full implementation of the Affordable Care Act (ACA), commonly known as ObamaCare. “[Expanding Medicaid is] the smart thing to do, and it’s the right thing to do,” Gov. Nixon said.

Although one could describe Gov. Nixon’s announcement in a number of ways, “smart” and “right” would not appear in the parade of appropriate adjectives. And amazingly, in a time of record deficits, budget shortfalls, and fiscal cliffs, it appears that the governor has no plan to actually pay for the new entitlement he is advocating.

So, how would the expansion work?

Like any good purveyor of smack would do, the first few hits of new federal Medicaid money will be on the house. Under ObamaCare, the federal government would cover the lion’s share of the expansion in the early years, but by 2017, Missouri would have to kick in tens of millions of dollars to support the program. Starting in 2020, new state Medicaid expenditures would top $100 million annually and into the foreseeable future. The Kaiser Family Foundation projects that the overall cost of a state Medicaid expansion under ObamaCare could top $1 billion over the next 10 years.

Of course, Gov. Nixon will be on his way out of Jefferson City when most of these new Medicaid costs would hit in earnest; indeed, the governor would never truly have to face the fiscal consequences of a fully enacted Medicaid expansion. The real pain to the state will only come after he leaves office.

While disappointing, the tactic is not altogether unexpected. For decades, American politicians have feasted on the dangerous public misconception that federal spending through the states is essentially free money.

It is not. Missouri taxpayers are also federal taxpayers, liable for the debts that the federal government incurs in their names. In the case of ObamaCare’s new Medicaid spending, it is all debt, and there is no level of government cost splitting that can change the fact that Missourians will have to account for that spending binge now and in the future through higher taxes, fewer services, and almost certainly higher debt burdens on our children and grandchildren. The governor is already having trouble admitting to this reality as he hawks his plan around the state, but this truth is inescapable.

This is not “smart” or “right.” This is “business as usual,” and Missourians cannot afford it.

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