The End of Federalism: How Obamacare Will Impact States
- Mandated Expansions: All the
health bills before Congress depend on a massive Medicaid expansion
to expand coverage. If Congress raises eligibility to 133% of the
federal poverty level, 33 states would see their Medicaid
populations increase by 30%, and 10 states would see their Medicaid
populations jump by 50%. Of course, this scenario is far worse if
Congress moves eligibility to 150% FPL, as proposed by the Senate
- Less Flexibility: The Obama Administration and Congress
have already taken numerous steps to roll back many of the
flexibilities extended to the state Medicaid and SCHIP programs.
The health care proposals would further restrict states ability to
manage and stabilize their own programs.
Unknown Costs: State Medicaid spending is already
outpacing projections. Recent surveys found that states saw an 8%
increase in spending during Fiscal Year 2009. Governors and state
officials should be skeptical of any promise from Washington that
these reforms will not add additional costs to the states. Governor
Bredesen (D-TN) warns that the costs to his state alone could be
over $3 billion.
Gutting State Authority
- Transferring State Power to Federal Regulators: The
bills before Congress would place an unprecedented amount of power
in the hands of the federal government, especially the Secretary of
Health and Human Services, to determine health insurance rules and
benefits. These powers have traditionally been held by state
- Minions to a Federal Bureaucrat: In place of its
traditional role of regulating health insurance markets, the states
would become merely an administrative arm of the federal
government. State action on health care would be based on dictates
and memoranda passed down from Washington.
- Flexibility in Name Only: The federal one-size-fits-all
approach of the bills before Congress would undermine state reform
and innovation. Each state has its own demographic and political
challenges, and no one federal solution can address the unique
needs of each state.
A Better Approach to Health Care
- Promote True Federal-State Partnerships: Instead of the
top-down approach of a federal health care reform, federal
policymakers should embrace the principles of federalism and allow
states to develop innovative ways to address their unique
challenges to health care reform.
- Preserve State Flexibility: Ease the
burden on states by giving them greater flexibility to modernize
and manage the Medicaid and SCHIP programs. This includes
preventing the weakening of existing state flexibilities.
- Tackle Fundamental Medicaid Reform: Expanding
Medicaid is neither new nor innovative nor reform. Rather than
expanding Medicaid, there should be a serious effort to reform it.
Such policies would include moving healthy moms and kids into
private health insurance through tax credits, premium assistance,
and vouchers and adopting a "money follows the person" model for
self-directing long-term care.
For more information, please visit: http://fixhealthcarepolicy.com