The Medicaid expansion provisions of the Senate bill are complex. In the first year of the program (2013), states must enroll anyone who earns less than 133 percent of the poverty level in their programs. For a family of four, the national average poverty level in 2009 is $22,000 a year. So any family that size that makes less than $29,000 would be eligible for Medicaid. Many states, particularly in the South, actually have Medicaid cutoffs that are below the poverty level. Arkansas, for example, cuts off its Medicaid eligibility at only 17 percent of the poverty level, and in Louisiana, it goes up to only 26 percent. For these states, the spending increase required by the new bill is huge.
For the first three years of the program (2013-2015), the federal government would pay for all of the costs of the Medicaid expansion. But, starting in the fourth year of operation -- 2016 -- the average state would be obliged to pay 10 percent of the extra cost.
For Democratic governors, this provision means sudden death. Particularly in states with limited Medicaid coverage, it would require huge tax increases that would bankrupt their states. This mother of all unfunded mandates is a tsunami coming at the states as Obama tries to shift to them as much of the program cost as possible.
The following chart indicates the amount of new state money each of the 39 affected states would have to come up with apart from federal aid to cover the unfunded mandate in the Baucus or Senate version of the health care bill:
STATE SPENDING INCREASES IN MEDICAID REQUIRED BY SENATE HEALTH BILL
Alabama $394 million
New Hampshire 59
New Mexico 102
North Carolina 599
North Dakota 14
South Carolina 122
South Dakota 33
Wash State 311
West Virginia 132
These data are rough calculations prepared under the advice and guidance of the Republican staff of the committee. The exact numbers -- which have not yet been released -- will vary due to a number of factors, some not even worked out yet in the bill. But they present a clear indication of the order of magnitude of what is coming down the pike for 39 states under this bill.
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