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  • Morning Bell: The Obamacare Burden To Your State Budget

    Facing a $25 billion deficit for their next two-year budget cycle, Texas lawmakers are considering closing the gap by dropping out of Medicaid. “This system is bankrupting our state,” State Representative Warren Chisum told The New York Times. “We need to get out of it. And with the budget shortfall we’re anticipating, we may have to act this year,” he said.

    And Texas is not alone. American Legislative Exchange Council director of the health and human services Christie Herrera tells NYT: “States feel like their backs are against the wall, so this is the nuclear option for them. I’m hearing below-the-radar chatter from legislators around the country from states considering this option.”

    Medicaid already eats up a huge share of state budgets. In Texas, for example, more than 20 percent of the state budget is spent on Medicaid. The crisis facing states across the country is that Obamacare forces states to massively expand their already burdensome Medicaid rolls. Starting in 2014 states must expand Medicaid to all non-elderly individuals with family incomes below 138 percent of the federal poverty level. At first, Obamacare picks up the first three years of benefit costs for expansion. But in 2017 states begin to shoulder a larger and larger share of these benefit costs, maxing out at 10 percent by 2020.

    But that is just the benefit costs. Obamacare does not pay for any of the costs necessary to administer the expansion of the Medicaid rolls, rolls that are expected to increase by approximately 50 percent in states like Nevada, Oregon, and Texas. The Heritage Foundation’s Ed Haislmaier and Brian Blase found that just the administrative costs of the Obamacare Medicaid expansion will cost almost $12 billion by 2020. As Heritage visiting fellow Lanhee Chen details, some states are beginning to add the benefit and administrative costs together, and the picture isn’t pretty:

    Texas recently concluded that the Medicaid expansion may add more than 2 million people to the program and cost the state up to $27 billion in a single decade. The Florida Agency for Health Care Administration estimated in April that Obamacare’s Medicaid expansion would require an additional $5.2 billion in spending between 2013 and 2019 and more than $1 billion a year beginning in 2017. In California, the Legislative Analyst’s Office concluded that Obamacare’s Medicaid expansion will likely add annual costs to the state budget in “the low billions of dollars.”

    Mississippi, Indiana, and Nebraska each retained Milliman, Inc., a national health care econometrics firm, to perform a fiscal analysis of the Medicaid expansion on their states’ budgets. For Mississippi, Milliman estimates that between 206,000 and 415,000 people will be added to Medicaid, with a 10-year impact on the state budget of between $858 million and $1.66 billion. The seven-year cost of the Medicaid expansion in Indiana is estimated to be between $2.59 billion and $3.11 billion, with 388,000 to 522,000 people joining the state’s Medicaid rolls. Finally, Milliman estimates that Obamacare will result in nearly one of five Nebraskans being covered by Medicaid at a cost of $526 million to $766 million over the next decade.

    Obamacare’s unfunded mandates are a fiscal time bomb set to explode state balance sheets across the country starting in 2014. States can prepare for the worst by slashing discretionary spending where possible and lowering existing health care costs by repealing their own burdensome health benefit mandates. But the only real solution is full repeal of Obamacare.

    Quick Hits:

    • Responding to recommended cuts from President Obama’s fiscal commission, NPR said it’s “imperative” that it receives federal funding.
    • President Obama’s economic stimulus waste, fraud, and abuse oversight board will meet at the Ritz-Carlton Hotel in Phoenix later this month.
    • Tennessee Governor Phil Bredesen (D) says President Obama should come back to the health care bargaining table with a “mea culpa” if Democrats want to have a meaningful conversation about improving the future of health care.
    • Seven of the nation’s 10 richest counties surround Washington, D.C.
    • As part of our “Lunch with Heritage” series, Nina Owcharenko, Director of the Center for Health Policy Studies, will answer your questions on what is wrong with Obamacare at noon today.
    Posted in Obamacare [slideshow_deploy]

    33 Responses to Morning Bell: The Obamacare Burden To Your State Budget

    1. Ken Jarvis - Las Veg says:

      Sure is GOOD to KNOW

      that Texas has Outlawed getting Sick.

      Will YOU be moving there, to save $$$?

    2. Mary.... WI says:

      This bill needs to be repealed. The few things that folks like in the bill can be placed in a new bill that isn't so costly to and obtrusive to everyone in this country. If not repealed it will be the demise of this country….or at least one of the things that will destroy the country as the list continues to grow.

    3. William D. Hoy Color says:

      Obama colliding with the economic conditions of the liberal states = tax terrorism.

    4. C LabOUNTY MERRITT I says:

      This "Obama Care" needs to be repealed now.

      My health insurance is going up 11.9% in January, (from $1023 to $1145 per month).

      It's no Cadilac plan — $500 deductibles with 85% to 15% split after) .

      And …………….. my propoerty taxes just went up $150 to to add insult.

    5. C LabOUNTY MERRITT I says:

      End Obama Care.

      We need to get medical care back to a competitive market — not governement and insurance companies regulating the cost and stifleing free market.

    6. Brian says:

      In Massachusetts where the model for Obamacare was prototyped, there is now the absurd situation of people who not being able to afford health care being compelled to buy a state plan which is as well unaffordable. These people are being fined with amounts which are as unaffordable as the health care itself:


      This insanity must stop!

    7. laurie, Hawaii says:

      I am67 years old, have had brfeast cancer, chemo and surgeries as well as severe knee arthritis in both knees. I have worked since 16 years old, beside put myself through college with no loans or grants. I must say, once I was forced onto medicare as my primary insurance because of my age, it has been a nightmare. Many wonderful doctors will NOT take medicare and the others triple the dharges so that I am better off ignorning all insurances and paying cash out of pocket. It is cheaper for me. So, I HATE any government wasteful management of my life. (except for our military to defend the country). DUMP medicaid and medicare…..they are all useless and a terrible loss. However, I paid in to Social Security for years……you government thieves stole my money….until I get back what you took from me, don't steal any more. Wake up America. We must stop playing Santa Claus to the world when we are sinking right NOW. Stop the hand-outs for those who did NOT put in money.

      Laurie in Hawaii (who was top Math student in class of 400)

    8. D. Wooldridge says:

      Hopefully, the guidance we've had continues here in Indiana. We've struggled to keep our heads above the waterline, and kept our balance sheet positive, but these new unfunded mandates will end up breaking every states' piggy bank.

      Every state is going to have to make some very hard decisions in the near future, all due to Obamacare. We all, on a state-by-state basis need to look at removing our state from the Federal iron fist, and work out the budgets by ourselves.

      These mandates are constitutionally illegal, and need to be challenged.

    9. Michael S. Hynes, Bo says:

      The entire health care reform bill, passed and enacted into law by the Obama administration is questionable from the start. We the American people have been informed through various media outlets that the creation of this monstrous bill were compiled by the Apollo Alliance; and then handed over to our elected officials to vote on. If this is true, I then ask, are we dunce? First and foremost, the Apollo Alliance is questionable medium, simply because it is funded by George Soros, as he does with other organization throughout the nation and the world at large for that matter. I believe most Americans are familiar with this individual and his antics, and if not they should be. This man is a danger to our country, and should be investigated by the Justice Department, and those elected to represent the American people. The health care reform bill must be repealed in its entirety without delay.

      Michael S. Hynes

      Boston, MA

    10. Blair Franconia, NH says:

      Texas is cutting spending, Maine, is cutting spending, New Jersey is cutting spending,

      New Hampshire is cutting spending. California and New York? They're not cutting spending. The federal government? Unfortunately, it's not cutting spending either.

      Why? Because we have obligations. Social Security, Medicare, and defense. What we should do with Social Security, and Medicare, is to do what Chile did with its Social Security system___privatize it. That's right. Privatize the entire Social Security

      system, including Medicare, and Medicaid, and sell them off to a major insurance company. Unfortunately, Social Security's the third rail of American politics. Touch it

      and you die. If senators and congressmen ran for only one term, then they could make the hard choices. They wouldn't have to worry about being defeated for reelection. If we cut federal pay, including congressional, and senatorial pay, by half, then there'd be an incentive for government employees to return to the private

      sector. Obamacare has to be killed. Like the vampire, it should have a stake driven

      through its heart.

    11. Tony, Brick, NJ says:

      The more I read about President Obama's Health Care Reform the more I see the massive expense of it. In the case of Medicaid expansion states, New Jersey included, just can not afford this. Like our government, states are soon going to be in a position where they just can not function if they do not get a handle on expenses like Medicaid.


    12. Marcus Kentucky says:

      Didn't Kentucky go thru all this mess and finally get it all recinded?

    13. Gloria Kravetz says:

      We have had Medicade for generations. Each generation gets rewarded for not working and staying home to have babies. The more children you have the more you can earn. Food Stamps have been used to purchase drugs or sold on the Black Market for Cash. We allow section 9 housing to these individuals and they destroy there housing conditions. While others rent in the same complex and pay the full price for rent they have to live with the low lifes who destroy there living enviorment. They Take NO RESPONSIBILITY FOR THERE ACTIONS.

      While others like ourselves work every day, pay our bills on time and try to be responsible we have to pay for people on WELFARE (Medicade).

      We have to stop this generational virvus and stop funding this program on the State Level as well as on the Federal Level.

      These people can go to work and make something out of themselves.

      Another problem and rip off is the vocational schools. They are funded by the Federal Education Programs and promise the world to these people and deliver nothing but debt for the receipients. Most of them owe over 10,000 for a 6 month course for LVN, secretary positions and medical aides. This is another area that needs to be addressed.

      Seniors on Medicare and Social Security. Most of the Seniors today that are on SSI have worked all of there lives and made there contributions into the system. That is not an entitlement. Not when they have paid there fair share. Medicare which is socialized medicine is not the answer. Nothing comes with a $0$ price tag.

    14. ROBERT 78 says:



    15. Dar says:

      ok so just a few ways to help the states:

      1. Anyone who is here illegally (unless it is a life or death issue ) should have to pay for any medical and or other services at the time they receive them or not get them at all.

      2. in order to get any kind of state or government help you should have to work at least 20hrs a weekand be prepared to take a urine and or blood test to prove you are not on any illegally drugs.

      3. Inmates should get the bare nessiaties and if they want more they must work for it like the rest of us, no more free education,medical, after all they are their because the broke the law we should not make it easy for them.

      4. The school system needs to stop giving free breakfasts just because the kids parents are too lazy and or hungover to make sure their kids are fed before they send them to school.

    16. velma moore says:

      I live in new mexico. I don't know where our debt is at but i do know that were in serious trouble thanks to bill richardson. Obamacare has taken me from $129.50 pr month to 341.00 pr month. What really irrates me is where did they get their no of people uninsured. Everytime a democrat tells the story it's a different no. How many of these are drug attics and won't work? I run a small business and I've been trying to hire for almost a month without any success because they can't past the drug screen, or they won't work saturday and sunday. Cut all their benefits and let them go to hell, is how I feel about this whole mess.

    17. Hendy, Walla Walla V says:

      The Nanny State Do Gooders seem to steal from the "Lock Boxes" then say you can't fix them, Medicare and Social Security.

      So when they systems go bankrupt these Doo Gooders will raise taxes and yup the higher brackets will pay for the lesser folks cause they're the only ones that have money and you can not get money from those on the dole. . .

      Time to bring back "Tar & Feathering" . .

    18. B. Hall Syosset N.Y. says:

      With regard to the health care situation, the entire insurance system should be structured as follows; The vast overwhelming majority does not need insurance to cover routine visits to their primary care docs. Well patient care on a yearly basis costs less than the cost of monthly premiums. What most need is catastrophic coverage. therefore their insurance should have a very high deductable, on the order of 5,000 $, to 10,000 $. this would greatly reduce monthly premiums. Some sort of health savings should also be instituted. This kind of plan would cover almost everyone, as most stay relatively well untill they get very much older. At that time the catastrophic plan would be activated. Employers could also adopt such a plan at a greatly reduced cost.

    19. Charles LABounty Mer says:

      Obama Care needs to be repealed now.

      My health insurance premium just went up 11.9%.

    20. RICHARD RASH, BRANSO says:

      We are local leaders in the TEA Party in our area and we would surely like for the Heritage people to research a list of Federal Programs and Departments we could begin pushing our Congress people toward. Cuts like the abolishment the EPA, Dept of Energy, The Dept of Education, Make illegal union membership for Federal Employs, Drastic cuts in gov Housing, Elimanate the FED. Institute the Fair Tax and elimanate the IRS. Just to name a few. If you could put dollar numbers to realistic cuts such as the above list by someone like Heritage whose numbers we could trust to make a stand on, it would greatly help the TEA Party to consolidate around and press for action. Thanks Richard Rash

    21. Pingback: ADF Alliance Alert » The Obamacare burden to your state budget

    22. Anna Garner says:

      California will not be able to pay a penny of the extra burden, but like most non-productive types, we simply that Obama will pay for us from his stash.

    23. Mike, Chicago says:

      A big part of the reason Texas and other states are going broke is because of all of the minorities on public aid. Many work and still collect public aid and pay little or no taxes. They take advantage of the system and others' misguided generosity. There are Caucasians on it as well, but not in proportion to blacks and browns. Further, many of the browns are here illegally or had kids when they were illegal here. Either way, the system does not work and has to be abolished the way it is. Only the seriously disabled deserve handouts.

    24. Pingback: Obamacare’s burden on the state budget - Orange Punch : The Orange County Register

    25. Dave Provo, UT says:

      Who wrote this massive government intrusion into our lives and pocketbook?

      Not the democrats they didn't even know what was in it! It was a group of socalist progressives who supported Obama not our Congress. Even Pelosi admitted she would find out what was in it after it passed and remember all the transparency in the Senate and House negoiations. We were sold down the river. Don't let the new congress do the same. Keep both eyes on them and make sure they know it.

    26. Steven L Wolf says:

      There is only one approach to create a sustainable, job-positive, tax-lowering end to the 'unsustainable' entitlement programs our states are being crushed under. Read the legislative initiative being spearheaded here in my home state of Georgia.


    27. Steven L Wolf, Atlan says:

      There is a legislative initiative that is being spearheaded here in Ga by yours truely. I've been working on it for almost a year now. It is a way for each state to finally put an end to our underfunded and unsustainable entitlement programs and replace them with a job producing, tax lowering, and private sector strengthening alternative. I would be honored if someone there at the Heritage Foundation took the time to read it and consider it as the 'comprehensive and sustainable reform' it is. Read it at:


    28. Gwendolyn, North Car says:

      It's obvious to me that Obamacare is just one more step toward enforcing America into becoming a Socialist Counry, with Dictatorship not far off. We are sitting back, being ambivelant, sending billions in aid to foreign Countries while we are allowing our "new kid on the block" President to spend lavishly on vacations for his family and numerous "friends" while apologising for, and downgrading the USA to any Country who will be pleased to listen. This is treason, by anyones standards! His plans are progressing, and we must stop it now! Our open borders are also a part of hs overall plan, and we must make sure, and SOON that our current laws are enforced, and that new legislation is drawn up to strengthen them. If we do not act fast,our next Generation will live under Sharia Laws, or some variable, at the very least, with a Dictator at the helm of our once great, free Country.

    29. Hugh Pecon Phoenix A says:

      Obama's healthcare scheme

      Well folks. If you didn’t believe it during the mid-term campaigns, now you know its true. Obamacare will have death panels. Just like every other socialist country with government run health care. On ABC’s “This week with Christine Amanpour”. New York Times columnist Paul Krugman said. "Some years down the pike, we're going to get the real solution, which is going to be a combination of death panels and sales taxes. It's going to be that we're actually going to take Medicare under control, and we're going to have to get some additional revenue, probably from a VAT. But it's not going to happen now."

      Obama’s healthcare scheme passed by a Marxist congress includes committees with powers to engage in price and cost controls. This is exactly what Briton has done and its resulted in the rationing of health care for the elderly.

      Krugman believes that death panels could be a way of controlling soaring healthcare costs, along with a new VAT tax. I guess he figures we will need the additional tax revenues to pay for Obama’s 159 new government offices and programs. Like the hiring of 16,500 new IRS agents at a cost of $10 billion. Also adding another 6,00 US Public health Service commission corps. Fidel Obama expands the commissioned corps with the creation of a “Ready Reserve Corps” to be mobilized “for service in time of national emergency.” What’s worse is that Obama set himself up as the one who hand picks the officers of this Ready Reserve Corps.

      Back in July 2 2008 the wannabe Marxist in Chief stated: We cannot continue to rely on our military in order to achieve the national security objectives that we’ve set. We’ve got to have a national security force that’s just as powerful, just as strong, just as well funded. This should be disturbing. Don’t we already have the national guard, Sheriffs, FBI, DEA, State police, local police? Could this be the first step towards Obama’s private national security force? A police state? Sound far fetched?

      Actually this all should be expected. Just look at the type of people Obama surrounds himself with.

      Manufacturing Czar Ron Bloom: “We know that the free market is nonsense. We know that the whole point is to game the system. We kinda agree with Mao Zedong that power come largely from the barrel of a gun.” Pay Czar Kenneth Feinberg: Here’s what I’ve said publicly in my pay determination- nobody should receive more than a base cash salary of $500,000 maximum.” Science Czar John Holdren: “redistribution of wealth both within and among nations is absolutely essential, if a decent life is to be provided for every human being.”

      You see a pattern here? Obama is a Marxist and he put into power his Marxist friends. Regulatory Czar Cass Sunstein said: “It is even possible that desirable redistribution is more likely to occur through climate change policy.” Czar by Czar Obama has placed far far left people in the infrastructure.

      America lets do a better job at electing a new president in 2012

    30. sue mancasola reddin says:

      the biggest answer is to allow the purchase of health insurance across state lines. the only oversight needed by government would be to insure that the companies are funded to cover their liabilities, and that fraud and abuse are monitored by simplifying the contracts.

    31. Jehnavi says:

      The health reform should benefited to all. The burden should be distributed in all evenly.

    32. S Virginia says:

      I'm scared.

    33. Hugh Pecon Phoenix A says:

      Note to the new congress

      Repeal Obamacare: Congress must immediately pass a law repealing Obamacare.

      Withhold Funding, Block Provisions and Regulations: Until Obamacare is repealed, Congress should withhold funding, block key provisions, and override regulations carrying out Obamacare.

      Proceed Carefully Towards Market-Based Reform: After Congress repeals Obamacare, it should give thoughtful consideration to practical adjustments to permit the free market to furnish Americans with affordable, effective health care insurance choices.

      Promote Personal Control: Congress should promote personal control of health coverage and costs through the free market, where individuals have the opportunity to make market decisions based on price and value. For example, Congress should redirect health care spending under the Medicaid and State Children’s Health Insurance Program (SCHIP) to help low-income families and individuals purchase private health insurance.

      Enable Portability: Congress also should enact a law that facilitates Federal and State activities to increase the portability of private health insurance coverage

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