President Barack Obama’s critics warned that his radical healthcare program would be an expensive boondoggle that would hurt the economy and cost tax payers millions.
Every day, these Obama critics look more and more right.
A government report finds that the cost of expanding Medicaid to millions more low-income people is increasing faster than expected, raising questions about a vital part of Obama’s health care law.
The law provided for the federal government to pay the entire cost of the Medicaid expansion from 2014 through the end of this year.
Obama has proposed an extra incentive for states that have not yet expanded Medicaid: three years of full federal financing no matter when they start. But the new cost estimates could complicate things.
In a recent report to Congress, the Centers for Medicare and Medicaid Services said the cost of expansion was $6,366 per person for 2015, about 49 percent higher than previously estimated.
“We were told all along that the expansion population would be less costly,” said health economist Brian Blase with the Mercatus Center at George Mason University in Virginia. “They are turning out to be far more expensive.” Blase previously served as a GOP congressional aide.
The new estimates could be a warning light for Democrat Hillary Clinton, who has promised that if elected president she would work to expand Medicaid in the remaining 19 states that have not done so. Higher costs would make it harder for a President Clinton to sell Obama’s full-financing plan to Congress.
Under the law, people making up to 138 percent of the federal poverty line — roughly $16,390 for an individual and $33,530 for a family of four — are eligible for Medicaid at little or no cost to them.
An estimated 9 million to 10 million people are covered by the Medicaid expansion, and many of the remaining uninsured are likely to be eligible if their states accept. Most of the new Medicaid recipients are low-income adults.
Medicaid has traditionally carried a social stigma, and conservative critics say it’s no better than being uninsured. But studies have debunked that perception, showing that Medicaid eases financial burdens and provides access to needed medical attention. It can be less complicated for consumers than the subsidized private insurance that’s also offered by the health care law, which requires people to account to the IRS for their financial subsidies.
The nonpartisan experts at the CMS Office of the Actuary wrote in their report that they were expecting costs to decrease in 2015. They had reasoned that uninsured people who were putting off care would sign up for Medicaid in 2014, the first year of expansion. The experts expected that pent-up demand would ease in 2015, and per-person costs would drop. But the opposite happened: Costs went up.
The report said the higher cost trend could be the result of different factors, from sicker-than-expected enrollees, to possible problems with the preliminary data that states are reporting.
Another significant driver is that upfront, per-person payments states make to the private insurers who manage their Medicaid programs have been considerably higher than expected.
Blase sees potential for waste because Washington is still picking up the full cost of the Medicaid expansion.
States “have virtually no incentive to be cost-conscious,” he said, and they are paying very high rates to benefit insurers and hospitals, major local businesses.
The government says state contracts with insurance companies usually include a mechanism for recovering overpayments. Still, it may take time to get back money that’s gone into an insurer’s bank account.
The Associated Press contributed to this article
Arthur Hartsock says
And remember that several Representatives and Senators earned the wrath of President Obama and their Republican leaders by fighting ObamaCare too vigorously. And you know one Senator in particular. I don’t have to tell you his name.
Main Street says
Baby mommas and daddies on welfare get free health care. Able bodied folks on welfare get free health care. Folks coming here from foreign lands get free health care. The wealthy don’t care. It’s only impact is on working class people who pay the majority of the taxes. They don’t matter anyway? Right?
That seems to be the way that it works..The premiums are beyond ability to pay for most of the middle class.
When was the last time agovernment program cost what was predicted? it usually turns out ot be 50 to 100 % more. The reaon peoplerob banks is cause that’s where to money is. Same with gument programs. Duihhhhh!
Alan Humphries says
Nah this was never predicted.Suckers!!!!!!!!!To late now the cowards in Congress won’t even go near this it’s re-election season.
Paid into medicare all my working life
Am now retired…and still payin for
Medicare. I thought death and taxes were forever. Medicare has gone up…but
Haven’t gotten a social security cost
Of living raise for four years. The
Illegals get more than i do.
Walter Hatfield says
Just so everyone gets the idea that their Social Security payments are threatened by the Democrats every time they want a tax raise but have you ever heard them talk about cutting any other programs or boondoggles? The president jumps on his 747 and flies all over the world giving foreign countries subsidies such as Saudi Arabia that has more money than us. My Social Security cost $140.00 a mo.. for part B ($1680.00 per Yr.) $166.00 deductable before it pays every year, then, they pay 80%, I have to purchase a Supplimental Plan that cost $134.00 a mo. to cover the 20% ($1608.00 per yr.). These charges are doubled since my wife also pays these charges,
Walter Hatfield says
Just so everyone gets the idea that their Social Security payments are threatened by the Democrats every time they want a tax raise but have you ever heard them talk about cutting any other programs or boondoggles? The president jumps on his 747 and flies all over the world giving foreign countries subsidies such as Saudi Arabia that has more money than us. My Social Security cost $140.00 a mo.. for part B ($1680.00 per Yr.) $166.00 deductable before it pays every year, then, they pay 80%, I have to purchase a Supplimental Plan that cost $134.00 a mo. to cover the 20% ($1608.00 per yr.). These charges are doubled since my wife also pays these charges also and neither of us have Dental or Eye Care. Total payments for myself and wife per year $6908.00.
Randall Thornton says
what ever happened to the age limit on medicare and medicaid? I had to wait until I was 65 to get it and then you have the deductible and yearly deductibles. Why do the worthless get all these for free when I had to work over 50 years to get this benefit? Something is terribly wrong here and needs to be fixed, just like food stamps. That has gotten out of hand in a big way. Buying candy, potato chips and all kinds of crap food. Glad to see some states putting a stop to it. How about the Feds?
Born in South and proud of it says
The feds will never put a stop to any thing it get them votes for freebies or payoff to cronies. I wonder how many millions of dollars are wasted on programs that either should have never been started or have long since ceased to serve any useful purpose. Any one want a few million to study the sex life of the Siberian Cricket or maybe to study why bat shit only stinks if you are down wind. What a frigging crock.
Trump 2016 for a chance to have some business sence in government
There are exceptions, for instance physical disabilities or medical disabilities. I admit there are cheaters, you find them everywhere. I paid into Medicare for 34 years until I was no longer considered employable. I had to hire a lawyer and fill out enough paperwork to eradicate and entire forest. I have 3 Doctors that had to verify my medical issues and well as previous Physicians charts, lab tests, medications and procedures. ALL my chronic conditions are verified and can not be “faked”. They could no be avoided. I was active, careful and healthy until I wasn’t. I worked in the healthcare field and was aware of the ramifications of an unhealthy lifestyle. I was not a fat slob that sat around eating crap as many people assume. I plan to donate my body to science so someone can figure out what the freak went went wrong. Generalizations get everyone into trouble. Be thankful you are not me!
Arthur Hartsock says
I was listening to an early-morning news program today. The announcer/reporter is guaranteeing that the next President will face a melt-down of ObamaCare. Many major insurance companies are limiting or eliminating their participation in the programs. By then Obama will be gone, so the next President/Congress will take the heat. I’m hoping Congress won’t bail out the insurance companies that lined up behind Obama and supported the Affordable Care Act. Let them pay for their own stupidity. And as you may know, Warren Buffet (huge Democrat Party supporter) owns the reinsurance companies that will have to cover these insurance company’s losses. Let him eat his crow lunch, too.
Be assured this was planned. It paves the way to total governmental control.
Sandra McCasker says
I live Australia we have had medicare since 1975 pensioners pay $5.60 for all prescriptions that include anyone with Healthcare card while working we pay 1.5% tax towards medicare when have prescription we can claim part back from medicare are public hospitals are free I really can’t understand why America has this problem we do have private insurance if you want to be treated in private hospital doctor of your choice I am amazed what you have to pay for your medical why Obama tried to change this seems big p hama control your goverment medicare here was brought in by labour goverment which would be democrats your country 40 years ago