NCPA - National Center for Policy Analysis

Election Gives States Momentum to Defeat ObamaCare

November 8, 2010

While the new Congress works toward repeal, states have to choose whether to enable or obstruct ObamaCare, which will further pummel states' fiscal situations, says John R. Graham, director of health care studies at the Pacific Research Institute and senior fellow with the National Center for Policy Analysis.

  • If ObamaCare takes full effect in 2014, 16 million to 18 million more people will become dependent on Medicaid, the program for low-income Americans that is jointly financed by the federal and state governments.
  • This influx will impose a huge burden on states' finances.
  • The law further requires increases to fees for Medicaid providers.

Although the federal government promises to pay most of the money for this expansion, starting in 2014, it gradually drops as soon as 2016.  The newly enlarged Medicaid will be so expensive that many experts have concluded that states' best course of action is to quit Medicaid and give up federal matching dollars entirely.

ObamaCare will also harm the health benefits that most working people currently enjoy.  The legislation presumes that states will establish "exchanges" that would choose health insurance for many of their residents, and will devour federal subsidies.

  • Official sources estimate that about half a trillion federal dollars will flow into exchanges between 2014 and 2019, but these likely underestimate the true costs.
  • The Congressional Budget Office estimates that 24 million people will enter the exchanges in 2019, of which only 3 million will come from the 162 million who would have enjoyed employer-based benefits under the current system.
  • The actual number will be far greater -- independent analysis concludes that anyone who earns less than $80,000 annually will be dumped into an exchange.

Beyond the refusal to collaborate, governors and legislators can seize the initiative by passing the Freedom of Choice in Health Care Act, which asserts the unconstitutionality of the federal government's mandate that everyone buy health insurance, says Graham.

Source: John R. Graham, "Election Gives States Momentum to Defeat ObamaCare," Pacific Research Institute, November 3, 2010.


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