NCPA - National Center for Policy Analysis


December 1, 2009

The magnitude of the new Medicaid spending required by ObamaCare is such as to transform the nature of state finances.  A large part of the reason that some states, particularly in the South, have been able to avoid higher taxes is because they have chosen to keep down the Medicaid eligibility level, say authors Dick Morris and Eileen McGann.

For example:

  • The hardest hit states would be Texas ($2.8 billion in extra state spending), Pennsylvania ($1.5 billion), California ($1.4 billion) and Florida ($909 million).
  • Florida might not be able to avoid imposing an income tax if it has to meet so high an unfunded mandate.

In many of the states represented by swing senators in the health care debate, the required increases in state spending are likely to be quite high, say Morris and McGann:

  • In Arkansas, where swing Sens. Mark Pryor and Blanche Lincoln live, the increased state spending required under the ObamaCare bill would come to $402 million (not counting the federal share), about a 10 percent increase in state spending.
  • In Louisiana, where Mary Landrieu has sold her vote in return for more Medicaid funding, the increase would come to $432 million (a 5 percent hike in state spending), more than wiping out the extra funds she got in return for her vote.
  • In Indiana, where moderate Evan Bayh is senator, spending would go up by $586 million, a hike of 4 percent.
  • In Ben Nelson's Nebraska, the additional state spending required under the bill would be $81 million, a 2 percent increase.
  • The ObamaCare bill would cost North Dakota, home of Sens. Kent Conrad and Byron Dorgan, $14 million, and in South Dakota, represented by moderate Democrat Tim Johnson, Medicaid spending would have to rise by $33 million.

Source: Dick Morris and Eileen Mc Gann, "ObamaCare To Hike State Taxes," Jewish World Review, November 30, 2009.

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