OBAMACARE MEDICAID EXPANSION AND THE LONG TERM DEFICIT

No politician ever lost their job thinking about the next election instead of the next generation. ObamaCare’s Medicaid expansion is an issue that might look good in the next election but not so good in the next generation.

Consider Governor McCrory’s dilemma. He recently said “I’m also trying to figure out what to do with Medicaid and whether to expand that or not, because the feds are offering all this money, and yet I’ve got to be concerned with the bureaucracy that could be grown because of that,” 

For the next election, Medicaid expansion is a no brainer. Washington is going to pay the bill through 2016,the next election. The Governor can giveaway a goodie, free health insurance to a bunch of able bodied adults who don’t work, and North Carolina taxpayers won’t see the cost. After the election, Washington claims they’ll pay 90% of the cost and North Carolina pays 10%. Over the next several years, North Carolina’s share will cost us $3 billion. A big new expense. But remember, the free goodies come before the election, the bill comes later.

As our Medicaid expansion $3 billion bill comes due after the election, forget about any more serious teacher pay raises.

And think about this. Who says Washington is going to shoulder 90% of Medicaid expansion costs forever?

The Congressional Budget Office warns the Federal debt is still growing. “The extended baseline projections show a substantial imbalance in the federal budget over the long term, with revenues falling well short of spending (see the figure below). As a result, budget deficits are projected to rise steadily and, by 2039, to push federal debt held by the public up to a percentage of GDP seen only once before in U.S. history (just after World War II). The harm that such growing debt would cause to the economy is not factored into CBO’s detailed long-term projections but is considered in further analysis presented in this report.”

 

The bottom line is Washington won’t have the money for 90% of the bill for Medicaid expansion forever. If we ramp up Medicaid spending now, forget about other state needs like teacher pay raises.

 

The Governor has a hard political choice. Giveaway goodies and look good before the next election. Or think about the next generation instead.