Back in July, Tennessee Gov. Phil Bredesen warned that his fellow Democrats’ health proposals would not only come with a trillion-dollar federal price tag. They would also represent “the mother of all unfunded mandates” for the states.
The answer: as much as $2.6 billion before 2020.
Two-point-six billion dollars, and in only five full years of spending. That’s under the bill passed in the House. The annual sum under that legislation would exceed half a billion dollars by 2019. (These and all other figures in this column, unless otherwise noted, come from the Department of Community Health.)
The Senate Finance Committee’s version would be little better: just over $2 billion cumulatively, and more than $400 million a year by 2019.
These figures represent only the state’s share of adding as many as 756,000 Georgians to Medicaid, which already serves one million state residents. Federal taxes would cover the vast majority of the new expenses.
Trillion may be the new billion in Washington, but down here even a measly million still means something. Georgia’s health-related budget for this fiscal year is already $3.5 billion, or one in five dollars the state government spends. So we’re talking about increasing health spending by at least 10 percent — or else cutting hundreds of millions of dollars from other health programs.
In absolute terms, we’re talking about adding about as much in health spending over five years as the state cut from last year’s total budget due to the recession. Another $900 million has been sliced from this year’s budget. The cuts would have been worse if not for federal stimulus money, which will run out long before a new Medicaid mandate hits.
All of this includes only those changes related to expanding Medicaid. New health laws could cost the state in ways that are less measurable for now, from increased insurance premiums for its own employees to the expense of running a new federally mandated insurance exchange.
Keep in mind, too, this phrase from DCH’s overview of the impact of expanding Medicaid: Both health proposals now before Congress “offer states a higher federal match at least initially to help pay for the medical costs of the newly eligible” people (emphasis added).
Translation: As Washington’s costs explode, Congress may try to shift more of the financial burden onto the states. As things stand, the Congressional Budget Office estimates that the House bill would cost state governments $34 billion in new Medicaid and State Children’s Health Insurance Program (SCHIP) spending (see footnote “c” on page 12 of the linked PDF).
All in all, this presents a significant, perhaps impossible, challenge for Georgia.
And it gets worse. Congress is also contemplating some people-shuffling which would cost Georgia even more money. The House bill would move kids in poor families out of SCHIP and into Medicaid. Because the feds reimburse states for those programs at different rates, Georgia could lose up to $48 million a year in federal matching funds if that switch takes place.
I’ve said it before, and I’ll say it now: We need to change our health-care system. The status quo works for many people. But even we, the relatively comfortable, have only tenuous security.
The “solutions” which Congress is now debating, however, fail on every level of logic, and for every level of government — and, by extension, taxpayer.
We can’t afford these plans. Scrap ’em. Start over.