Tanner: Obamacare Medicaid Sign-Ups Put Nation on 'Road to Insolvency'

Monday, 09 Dec 2013 10:16 AM

By Sandy Fitzgerald

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Most of the 1.6 million Americans who have signed up for Obamacare have actually enrolled in Medicaid, a trend that could end up slamming federal and state government budgets.

Medicaid, Medicare, and Social Security already account for 48 percent of federal spending, writes economist Michael Tanner, a senior fellow for the Cato Institute, in an article for The New York Post. But with Obamacare adding to the Medicaid costs, the nation is headed towards "insolvency," Tanner writes.

The Medicaid program is already the third-largest government program in the United States, behind Social Security and Medicare, with more than $265 billion a year being spent. Since Oct.1 when Obamacare enrollments started, about 1.46 million have been added to the Medicaid rolls.

"It’s going to get worse," Tanner warns. "Congress has shown no ability to reform Social Security or Medicare. With Obamacare adding to Medicare spending, we are picking up speed on the road to insolvency."

Tanner notes that the Congressional Budget Office has projected Medicaid spending will more than double in the next decade and will top $554 billion by 2023 in federal dollars alone. State governments are already paying $160 billion, their largest expenditure for the program ever.

The projections on Obamacare did not account for the fact that so many people would be Medicaid-eligible, said Tanner. Planners expected that most people who enrolled would qualify for subsidized private healthcare programs.

Since Medicare will put a burden on the nation's struggling federal budget, it may not take long before changes in how Washington reimburses states are ordered, which could cost states millions of dollars.

"Every bit as bad as the cost is the fact that for all this money, recipients are going to get pretty lousy health care," said Tanner, pointing out studies that show Medicaid patients "wait longer and receive worse care than the uninsured."

It was a mistake he added, to increase the Medicaid rolls without increasing the number of doctors willing to accept Medicaid patients.

"We don’t know yet whether the rush to Medicaid will continue," Tanner said. "It may be that the troubles with the Obamacare website might have skewed the early signups. But if Obamacare really does lead to a massive expansion of this costly and inefficient program, that’s bad news for taxpayers, providers and patients."

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