25 States, Unfortunately, Expand Medicaid

25 states, plus the District of Columbia, have now signed on to take part in an aspect of the Affordable Care Act that is both optional and ill-considered. More states are expected to follow suit, even some that, like Ohio, have Republican governors and conservative legislatures.

Like Medicare, Medicaid has for a long time posted year-over-year spending increases.

The Department of Health and Human Services estimates that annual increases will average about 6.4 percent until 2021, when the federal government and states will spend $795 billion on the program.

By that time, too, the states will be on the hook for 10 percent of costs for the Medicaid expansion on top of other increases in the program; if past projections of the cost for federal health care programs are any indication, expect the estimates for the cost of the Medicaid expansion-and Obamacare more generally-to be way short.

Indeed, in 2012 the CBO doubled its cost estimate for the first full decade of Obamacare, from $938 billion to $1.76 trillion.

To be sure, the prospect of a $9 federal match for every $1 of state spending seems like a win-win proposition for states. But the Cato Institute’s Michael Cannon notes that given increasing amounts of federal debt and other entitlement spending, “It is wildly unrealistic to assume the federal government will maintain the Medicaid expansion’s nine-to-one matching rate.”

The states that have thus far refused to expand Medicaid are actually thinking more clearly about where taxpayers will be a decade from now.

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