February 5, 2015 Print

Funding from the federal government can seem like “free money” to state officials who don’t have to take a personal role in levying higher taxes to hand out extra services to their constituents. The federal push to expand Obamacare’s Medicaid eligibility is therefore proving to be a tempting initiative even among politicians who have some reputation for fiscal responsibility. As a recent commentary in the Wall Street Journal points out, though, there’s nothing free about federal dollars — and they always come with an array of tangled regulatory strings attached.

The article, written by Christie Herrera, senior fellow with the Foundation for Government Accountability, and Justin Owen, president and CEO of the Beacon Center of Tennessee — both Atlas Network partners — tackles the problems with the Medicaid expansion as proposed in the Insure Tennessee plan advanced by that state’s governor. Although the plan died in the Tennessee legislature on Wednesday, the commentary’s insights are required reading for other states considering a similar expansion.

As Herrera and Owen explain, Obamacare Medicaid expansions suffer from several fundamental pitfalls, including:

  • Every dollar used to finance the expansion of Medicaid is a dollar borrowed and added to the national debt.
  • The expansion floods the system with people who are significantly less needy than existing Medicaid-eligible patients, reducing chances for them to receive care.
  • The plan provides new incentives for many private employers to drop their employee premium coverage and let taxpayers make up the difference.
  • Ultimately, hospitals will receive billions of dollars in new taxpayer subsidies.

Read the rest of the analysis in their full commentary, “Tennessee’s Plan to Expand Medicaid Doesn’t Add Up,” in the Wall Street Journal.

Read more Foundation for Government Accountability Medicaid research.

View Beacon Center of Tennessee’s health care reform proposals.