Tuesday, July 2, 2013

Yes - Medicaid Expansion Looms Large

We believe Americans understand the "ponzi" scheme called Social Security that is imposed on most of us, excluding politicians and public sector employees, of course. And it's been widely reported on the looming problems with Medicare that will hit even earlier than Social Security. In May the government trustees reported that Medicare's trust funds are exhausted in 2026 and Social Security trust funds exhausted in 2033. In other words, they're going broke if nothing is done.

But what about Medicaid? Well the Tampa Tribune decided to address that issue in their Op-Ed yesterday "Medicaid Expansion Looms Large":
The state's decision to reject $51 billion in federal money to expand Medicaid looks more foolish with each passing day.
Really? Does the Tribune think this money grows on trees and is "free"? Perhaps a closer look at Medicaid is needed because many Americans may not understand how it's funded or it's long term financial outlook.

Tribune's Free Medicaid Money Tree

Medicaid is funded jointly by the feds and the states for low-income individuals and families. In Florida, Medicaid was 18% of the state budget in 1999 but has grown expeditiously where Medicaid is now one third of the entire state budget. And the problem of fraud has been high as claims have been filed for services not rendered or claims filed for unnecessary services and treatments. According to BizPac review:
The unfunded obligations of Medicaid are trickier to estimate than Social Security and Medicare. That is because Medicaid funding comes from general tax revenue funds and fluctuates year to year. Unfunded obligations for Medicaid were estimated at over $20 trillion prior to Obamacare being passed. According to the Senate Budget Committee, this new “health care law adds $17 trillion in new unfunded liabilities… by massively expanding the Medicaid program and creating new Exchange subsidies."
But is this just another "ponzi" scheme? ObamaCare intends to swell the Medicaid program by adding millions of people to this already financially distressed program. The carrot the federal government uses to entice the states to expand Medicaid is the feds have promised to cover 100% of the expansion costs for three (3) years (2014-2016) and then decrease their funding to 90% by 2020. That federal promise must rely on the assumption that it will keep all of its spending pledges as alarms continue to be raised about our increasing debt obligations. Our country currently has over $17 Trillion in direct debt and the estimates for our total debt that includes these unfunded liabilities range from $80 Trillion to over $120 Trillion.

If and when the feds do cut spending, the states will be left with a huge gaping liability. According to this Forbes article:
Medicaid is cumbersome, complex, and wasteful – already the worst health care program in the country. That means the poorest and most vulnerable patients enrolled today will be competing with millions of new Medicaid patients for appointments to see a limited number of physicians. Those who have the greatest need and nowhere else to go are likely to have the hardest time getting care. 
We agree with Speaker Weatherford who was referenced in the Tribune Op-Ed:
But the Senate plan was rejected by House Speaker Will Weatherford, who made the specious argument that accepting money to expand Medicaid would deepen the country's debt.
Apparently, the Tribune is for risking the state's finances, adding more federal debt and putting the most vulnerable's medical needs at risk. 

So Yes - Medicaid expansion looms large because Medicaid is broken and in dire need of reform not expansion.

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