Tipsheet

Obama Expects States to Pick Up Obamacare Tab

President Obama's health care law was projected to spend $898 billion over ten years when it was passed. That price tag largely masked the true ten-year cost because of the delayed implementation of the law, and the CBO revised its cost estimate in 2013 to show that the law will spend $1.85 trillion in the next ten years.

Obamacare is already experiencing cost overruns, and the Obama Administration expects the states to pick up the tab.

One of Obamacare's provisions, the Pre-Existing Condition Insurance Plan, has nearly run out of its $5 billion budget, and HHS Secretary Sebelius has proposed that the states that run the administration of the program find a way to pay for it themselves.

The root of the problem is that the federal health care law capped spending on the program at $5 billion, and the money is running out because the beneficiaries turned out to be costlier to care for than expected. Advanced heart disease and cancer are common diagnoses for the group.

Obama did not ask for any additional funding for the program in his latest budget, and a Republican bid to keep the program going by tapping other funds in the health care law failed to win support in the House last week.

State officials say one likely consequence of the money crunch will be a cost shift to people in the program, resulting in sudden increases in premiums and copayments. Many might just drop out, said Keough.

Republicans should have pushed harder to fix this program, but the issue brings up that Obamacare was poorly designed and poorly implemented from the start. It turns out that if legislation relies on moving pieces, state partnerships, and delayed implementation, the legislation is just poorly designed.