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Originally published December 15 2013

The ticking Medicaid time bomb

by J. D. Heyes

(NaturalNews) One of the worst parts of the Affordable Care Act - besides the fact that it is unaffordable for millions of Americans - is the negative impact that it will have on our national debt.

When the president and his minions were selling this turkey to the American people, one of the "selling points" was that the law would expand Medicaid coverage to Americans whose incomes were four times the official poverty level.

That's great, you say. More struggling families will be covered.

Only, this expanded subsidized health coverage - which is nothing more than another progressive government transfer of wealth - was supposed to be more than paid for by un-subsidized enrollees in the federal online health exchange (

The trouble is, these enrollees have not materialized; they're not signing up for insurance under the exchange.

But I'll tell you who is signing up - Americans who now qualify for the expanded Medicaid coverage.

Hello, budget buster.

The problem has been well-documented by the Cato Institute's Michael D. Tanner, in a column for the New York Post:

The good news, if you want to call it that, is that roughly 1.6 million Americans have enrolled in ObamaCare so far.

The not-so-good news is that 1.46 million of them actually signed up for Medicaid. If that trend continues, it could bankrupt both federal and state governments.

We're dumping all of this on our kids

Already, Medicaid is the country's third-largest government entitlement program, behind Social Security and Medicare, as a proportion of the federal budget. Nearly 8 cents of every dollar that the federal government spends goes to Medicaid, which amounts to more than $265 billion a year.

Taken together, Social Security, Medicare and Medicaid spending account for nearly half - 48 percent - of all federal spending. And within a few years, these three programs will exceed 50 percent of federal expenditures, Tanner notes.

The news going forward, barring any budgetary or revenue changes - or, heaven forbid, true entitlement reform - isn't encouraging for future generations.

[I]t's going to get worse," Tanner writes. "Congress has shown no ability to reform Social Security or Medicare. With ObamaCare adding to Medicare spending, we are picking up speed on the road to insolvency."

And now, get ready for the Obamacare contribution to this terrible economic news:

The Congressional Budget Office projects that, in part because of ObamaCare, Medicaid spending will more than double over the next 10 years, topping $554 billion by 2023.

And that is just federal spending.

State governments pay another $160 billion for Medicaid today. For most states, Medicaid is the single-largest cost of government, crowding out education, transportation and everything else.

And as the state portions of Medicaid increase, there will be even less money for other line items.

Now do you know why several states have refused to start their own Obamacare exchanges?

What's worse, all of this was anticipated. Tanner says the designers of Obamacare "saw the expansion of Medicaid as an important feature of their plan to sell coverage to the uninsured. Still, they expected most of those enrolling in ObamaCare to qualify for private (albeit subsidized) insurance."

The debt bomb is coming

He says it isn't a safe bet that the government will actually live up to its promise of covering the expanded state Medicaid costs by paying 100 percent of those costs for the first three years, and then 90 percent of the expanded costs after that.

Why? Because the federal government has a budget crisis that it must deal with or the nation will go broke. With $90 trillion already in unfunded entitlements, Obamacare might just be the economic straw that busts the bank; at some point, Washington will be forced to deal with a fiscal crisis of its making, and that will entail dramatic cutbacks in funding for government programs, if some of them even survive the budget ax.

"In fact," Tanner writes, "as part [of] last December's fiscal-cliff negotiations, the Obama administration briefly considered changing to a 'blended' reimbursement rate, somewhere between the current and promised rates. The administration quickly backed away from the offer, but it's likely to come back in the future. If it does, it would cost New York tens of millions of dollars."

You can't trust Washington on this one, like we couldn't trust Washington to manage the nation's healthcare industry. This Medicaid expansion is just another fiscal time bomb waiting to explode.


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