Last week, with little fanfare, the U.S. Senate passed a bill to begin dismantling Obamacare. Some pundits have spun the move as little more than “political posturing” or a toothless act that simply fulfills the campaign promises of a newly elected GOP majority. The truth is that this Senate vote is much bigger than Obamacare supporters would like you to believe. In fact, the Senate vote has literally changed the Obamacare debate forever.
The Senate bill repealed the employer and individual mandates, repealed the Cadillac and medical device taxes, eliminated exchange subsidies, and removed the federal government’s authority to run the Obamacare exchanges. All good things.
But what may be the most significant—and least discussed—change is sure to send shockwaves through all 50 state capitals: the U.S. Senate voted to repeal Obamacare’s Medicaid expansion entirely.
To paraphrase Vice President Joe Biden, “This is a big freaking deal.”
For the 20 states that have rejected Obamacare’s Medicaid expansion, the Senate vote brings vindication. Speaker Paul Ryan has been warning states for years that Medicaid expansion funding won’t last. Even President Obama has proposed slashing expansion funding. These states heeded those warnings and, as a result, their fiscal future is more secure.
For states like Kentucky and New Hampshire that are poised to rollback their expansions entirely, the Senate vote is confirmation they’re on the right track. It’s no longer a question of if expansion funding will be cut but when. The sooner these states can extricate themselves from the Obamacare expansion nightmare, the better.
And for the 30 states that fell for the false promise of endless “free” money from D.C., this vote should be a wakeup call.
Medicaid expansion has been an unmitigated disaster. It has increased government dependency greater and faster than anyone predicted, leaving state taxpayers on the hook for far higher costs than they anticipated.
In Kentucky, they’ve enrolled more than twice as many able-bodied adults than expansion supporters promised and, as a result, the state expects the program to come in at $1.8 billion over budget for its first two years.
Ohio’s expansion was $1.5 billion over budget in the first 18 months. They’ve enrolled 33% more people than the state promised would ever possibly sign up.
And in Washington, where they’ve more than doubled their enrollment projection, state officials have been forced to revise their expansion budget five times, to the tune of $2.3 billion.
Unfortunately, these states aren’t outliers. In fact, every single expansion state with available data has exceeded the enrollment and budget promises made by Obamacare supporters.
These states are scrambling right now to find the money to cover their share of the expansion costs, which are due in the next budget year. (As it turns out, “free” money doesn’t last forever.) If they keep their expansions, they’ll be forced to choose between cuts to the truly needy in the traditional Medicaid program; cuts to other budget priorities like schools, roads, or public safety; or massive tax increases – all choices that are incredibly unpopular with voters.
For these states, and indeed for every state that’s contemplating their Medicaid future, what happened in Washington D.C. last week was far more than a “show vote.” It was a clear signal that, whether through gradual funding cuts or outright repeal, Medicaid expansion’s days are numbered.
States should start locating the exits, not rearranging the deck chairs, because regardless of what happens when the bill reaches the White House, the Senate has fundamentally changed the Obamacare debate forever.