ALEXANDER: Resisting the Medicaid-expansion temptation

Obamacare’s promise of federal funds won’t offset the costs

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States will find themselves in an even greater predicament, putting more and more of their residents on the welfare and Medicaid rolls as poverty rates increase, but garnishing fewer federal resources to cover escalating costs.

Theoretically, our analysis might be proven wrong if states could strictly limit the projected growth of the Medicaid caseload to the “expansion” population; meaning, the working-age, able-bodied general population with household earnings between 100 percent and 138 percent of the federal poverty line.

However, every state anticipates that the overall growth of their Medicaid programs, driven by the growth of specialized populations that are the costliest and most complex to serve (the disabled and the elderly) will continue.

Yet the Obamacare Medicaid-expansion provision introduces a strange dynamic to the nation’s public welfare system: States will see a relative reduction in the federal match for the most vulnerable and needy Medicaid populations, but a relative gain in the match for the newcomers; namely, the able-bodied living above the poverty line.

Contrary to the claims of the powerful health care industry, Medicaid expansion will only ensure that states will remain on a fiscal collision course as their Federal Medical Assistance Percentage rates decline.

Let’s just hope that the handwriting on the wall, coupled with rising public disillusionment with Mr. Obama’s signature legislative achievement, keeps the holdout states from going down that treacherous path.

Gary D. Alexander, founder and president of the Alexander Group, served as Pennsylvania’s secretary for public welfare from 2011 to 2013.

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