Cato's Tanner: 9-in-10 Obamacare Sign-Ups Are for Medicaid

Image: Cato's Tanner: 9-in-10 Obamacare Sign-Ups Are for Medicaid

Monday, 09 Dec 2013 10:06 AM

By Sandy Fitzgerald

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Some 1.6 million Americans have registered for Obamacare, but more than nine-out-of-10 of them actually signed up for 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, "we are picking up speed on the road to insolvency," Tanner writes.

The Medicaid program is already the third-largest government program in the United States, coming in only behind Social Security and Medicare, with more than $265 billion a year being spent.

"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 said of the 1.6 million who have signed up under the Affordable Care Act, 1.46 million have gone into Medicaid.

The Congressional Budget Office has projected that Medicaid spending will more than double in the next decade, and will top $554 billion by 2023 in federal dollars alone, Tanner pointed out, and state governments are already paying $160 billion, marking their largest expenditure.

The projections on Obamacare did not see that so many people would be Medicaid-eligible, said Tanner, with planners expecting that most people who enrolled would qualify for subsidized private health care programs.

Since Medicare will put a burden on the nation's struggling federal budget, it may not take long before changes in how the federal government 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," while reimbursing doctors only 72 cents out of each dollar of costs.

With Obamacare increasing the Medicaid rolls without increasing the number of doctors who will accept it, the quality of care will only become worse, he warns.

"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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