State Budgets Are Starting To Face Deficits Due To Obamacare

Obamacare delivered the trojan horse of a debt bomb when it was implemented. Now state legislators are left to deal with actual budget consequences from expanded medicaid.

Many voters do not realize that states have to match pre-Obamacare medicaid with 50% of state revenue with the federal government picking up the other 50%. When Obamacare was expanded, short sighted politicians expanded medicaid with 100% full reimbursement from the feds. That came with a caveat of course. After a few years, medicaid expansion would only be funded 90%, with the state picking up the other 10%.

States made projections of how many would enroll into medicaid. Many of those enrollment estimates were way off and millions more enrolled nationwide than what was projected. Add in rising costs of healthcare inflation, the debt storm is coming to shore. State legislatures will start dramatic cuts elsewhere (law enforcement, education, road funding, etc.) and massive tax increases once the costs start getting truly out of control.

Here’s is a roundup nationwide of what is going on:

Missouri legislators are facing a budget deficit and a growing expansion of medicaid:

Galloway also acknowledge the growth of Medicaid spending and its impact on the state’s budget. In 2003, Medicaid made up 19 percent of state general revenue spending. By 2016, it was 23 percent.

South Carolina had to add another $60 Million to Medicaid spending while their pension system got half of that and public colleges had reduced spending:

Nearly $60 million in added state money to cover the costs of the 1 in 4 South Carolinians who get their health insurance through Medicaid.

Last year, the S.C. Legislature voted to shore up the state’s woefully underfunded pensionsystem. Those changes – requiring state, county and city workers, law enforcement officers and teachers and their employers to pay more into the S.C. retirement system – will help the state pay about $20 billion in unfunded benefits that have been promised to state workers and retirees.

The state’s public colleges will not get nearly the amount of money they wanted in the 2018-19 budget. This year, only $50 million in one-time money was put in the budget to address building and maintenance costs for colleges. For instance, the University of South Carolina asked for $50 million to start the construction of a new $200 million campus for its School of Medicine. House budget writers approved $5 million.

Wisconsin increased medicaid spending for dentist visits but face reality of costs:

Since October 2016, the state has boosted rates for dentists in those four counties. In general, he says, patients on Medicaid have serious tooth problems and may not have seen a dentist in a long time — if ever. Few — if any — funds are expected to be left from the pilot program which cost $13 million: $5 million of which came from state funds. The rest came from the federal government. Going to 72 counties is going to be very expensive,” said Dane County dentist David Gunderson.

Alaska legislators are now claiming they were never told the truth of medicaid spending:

With Alaska facing a $2.5 billion budget deficit and with state savings dwindling, the issue of the state’s annual supplemental budget has become a thorny one that could draw bloody red ink. Lawmakers have fired back, saying they have been misinformed about the costs of Medicaid and other programs. This year, the biggest single item in the supplemental budget is $93 million for Medicaid.

Lawmakers in the House and Senate have declaimed the rise in Medicaid costs amid the significant budget deficit, but in a remarkable January hearing, the Legislature’s own nonpartisan finance director said lawmakers were themselves at least partially to blame.


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