Obamacare Will Bankrupt States

Sen. Graham: 'Obamacare' Will Bankrupt States, Allow Them to 'Opt-Out' of Medicaid

On the Record
September 21, 2011

VAN SUSTEREN: Health care -- you say that the president's going to bankrupt the states. Do you have a solution?

GRAHAM: Yes, I do, Medicaid. Medicaid is a program at the federal government level that the states administer with a lot of federal government mandates for low-income people. Under the Obama health care bill -- remember that bill...

VAN SUSTEREN: Right.

GRAHAM: ... that was passed in the middle of the night behind closed doors, and they bought 60 votes? That bill? And it expands Medicaid eligibility in my state so that 29 percent of the people in the state will be on Medicaid, 17 million more people will be added to state Medicaid rolls. It will bankrupt...

VAN SUSTEREN: Nationwide?

GRAHAM: ... my state...

VAN SUSTEREN: Is that your state, the 17 million, or...

GRAHAM: The 17 million for the country...

VAN SUSTEREN: OK.

GRAHAM: ... 485,000. And here's what my governor said. The "Obamacare" Medicaid expansion is a disaster for South Carolina's budget. With an opt-out provision, which Senator Barrasso and myself have proposed...

VAN SUSTEREN: OK.

GRAHAM: OK, we're going to allow states -- you know, did you have a voice in this health care debate? Remember when I was on here with you the night before it was passed? I had saw the bill, like, a few hours before we were going to vote on it. Remember that?

VAN SUSTEREN: I do remember that.

GRAHAM: No one's had a say in the country about Obama health care. It's all done in this building behind closed doors. What Senator Barrasso and I have said, give states -- in Texas, it could cost them $24 billion of new money to match the expansion. The state has to put dollars on the table to get federal government Medicaid dollars. In my state, $1 billion will be required for South Carolina to come up with in the next decade to get federal Medicaid money, 29 percent of my state...

VAN SUSTEREN: So you want -- so you want to opt out.

GRAHAM: Opt out!

VAN SUSTEREN: OK, but here's the problem with you opting out. The whole idea of everybody being in is everybody's contributing to lower the cost of health care. So if you opt out -- now, I mean, if everybody -- plus, we've got the problem that the president through the HHS has issued thousands of waivers. A lot -- everyone's jumping ship! So it's going to -- they're going to leave about five of us left standing paying for this!

GRAHAM: That's in the private sector. Tom Coburn said something last night on your show that was very important. When you ask employers what's the biggest impediment to hiring, what's the biggest reason you're not hiring people, you don't know what your health care costs to be because of the Obama health care bill. If you want to put states in perpetual bankruptcy, expand Medicaid. Medicaid is a program that doesn't work very well. Adding 17 more million people to the program.

VAN SUSTEREN: OK. Let me ask you about that 17 million.

GRAHAM: Will bankrupt...

VAN SUSTEREN: Let's say that you -- let's say you opt out, your 485,000 people...

GRAHAM: Yes.

VAN SUSTEREN: ... who are on Medicaid, the expanded Medicaid. What happens to those 485,000 people when they get...

GRAHAM: The State of South Carolina, believe it or not, has the ability to deliver health care services based on what we think is best, not what Washington.

VAN SUSTEREN: What does that mean? (INAUDIBLE) going to be a cost.

GRAHAM: Well...

VAN SUSTEREN: I mean, what -- I mean, what -- you said -- are you saying you can do it...

GRAHAM: I am saying that it would allow the states from being forced into Medicaid expansion when they can't afford the Medicaid bill they've got. The 485,000 people that are going to put on Medicaid in South Carolina, the 17 million nationally, is going to create state budget liability that will make it impossible...

VAN SUSTEREN: How -- how's that different than...

GRAHAM: We have to cut education. We'll have to cut law enforcement. Where are we going to get the billion dollars from?

VAN SUSTEREN: But explain to me, though -- I mean, if -- I mean, OK, let's -- the 17 million, if they're dumped out of the federal Medicaid and if the states are going to pick...

GRAHAM: They're not in Medicaid now.

VAN SUSTEREN: OK, but let's say -- let's say they're not because of the opt-out provision. All right, the 17 million then become the burden of the states or you don't do anything for them at all.

GRAHAM: Well, what I would like to do is find a way to provide a access and quality health care without bankrupting my state. It would be possible, I think, to insure people without "Obamacare." "Obama care" increases federal government programs to the point that only 20 percent of the country will be in private sector health care by 2014.

My state, California, Texas and other states will have to enroll hundreds of thousands of new people, and it will put pressure on our budget. There's a better way to insure people than to require the state of South Carolina...

VAN SUSTEREN: Are you saying that you can deliver the same medical care to these 485,000...

GRAHAM: Oh, my God!

VAN SUSTEREN: ... but cheaper? But cheaper.

GRAHAM: My God, yes! I mean, the whole -- 19 percent increase in health care premiums because of Obama health care. If you want to look at the most expensive way to run health care, let the federal government run it. Now, are we one government program short of a perfect world? Do you really want more government involvement when it comes to your doctor- patient relationship?

VAN SUSTEREN: I'm just trying to understand -- I'm just trying to understand your proposal. I'm trying to understand the down side here.

GRAHAM: And these are good questions. What you need to understand -- these very good questions (INAUDIBLE) should Medicare and Medicaid, which are hopelessly bankrupt, be expanded? How much should the federal government do when it comes to health care?

VAN SUSTEREN: See, what I don't understand, though, is that -- and we only have 30 seconds left -- is that if you opt -- if your state opts out and a lot of other states opt out...

(CROSSTALK)

GRAHAM: ... have to do another bill.

VAN SUSTEREN: Whatever -- and you've got these thousands who got waivers -- I feel like I'm the only one left in the program!

GRAHAM: You are because -- well, you know...

VAN SUSTEREN: I mean, the whole idea was that it was supposed to be inclusive! I mean, it is -- is bleeding!

GRAHAM: Start over and do it right. Repeal Obama health care. Allow states to opt out. Get this debate out of this town, back to the states. I guarantee you half the states would opt out of this expansion within 30 days.

VAN SUSTEREN: And of course, we still have to hear from the Supreme Court on it, as well.

GRAHAM: Yes. It's a bad deal for America, bad deal for the states.

ObamaCare Will Bankrupt the States

March 30, 2010

Americans for Limited Government - One of the central aspects ObamaCare, besides the individual mandate to purchase insurance, is the expansion of Medicaid eligibility to 133 percent of the poverty level. To entice Democrat lawmakers, especially in the Senate, to vote for this, Senate leaders assured the states that the federal government would cover the costs of the expansion until 2014. After that, they said, the states would be responsible for paying for 10 percent of the expansion.

According to the Kaiser Commission on Medicaid and the Uninsured, the Medicaid expansion would “result in large increases in eligibles in most states and many new enrollees. Not only would eligibility standards be extended but the individual mandate, though somewhat difficult to enforce at these income levels, will mean that large numbers of both previously eligible and newly eligible people will enroll.” In other words, costs will go up. A lot.

Now the states are pushing back. Their case: the cost increases are immediate—and they are devastating. As reported by the AP, Arizona has said that the new Senate bill is forcing Arizona to rescind cuts it intended to make to Medicaid to balance its budget. As a result, says Arizona, the state will have to pay at least $3.8 billion in additional costs before 2014.

It gets worse, from the AP report,

“For the seven years starting in 2014, Arizona will have to spend an additional $7.8 billion, AHCCCS Director Tom Betlach said in the report.”

That’s money the people of Arizona simply do not have. Arizona, which already faces a $2 billion deficit on a $10 billion budget this year, now must find nearly an additional $1 billion to pay for the Medicaid cost increases.

In contrast, if Arizona’s eligibility had not been expanded, its costs over that same seven year period would have only been $1.8 billion. Therefore, thanks to ObamaCare, by 2020, Arizona will be a full $9.8 billion more in the hole than they would have been. This is a state that is literally on the brink of bankruptcy. Only California has a worse financial predicament than Arizona.

And that is just one example. In South Carolina, the state’s Department of Health and Human Services has said that the Medicaid expansion through 2019 will cost and additional $914 million, or about $100 million a year. South Carolina already faces a $1 billion deficit this year alone, and now will have to find additional sources of revenue to pay for what amounts to a mandate.

Coupled with mandatory insurance, the states are, in effect, being forced to bear the burden of anyone who is eligible for expanded Medicaid. Consider California where, according to the state’s deputy director of health care programs, “the extra load will cost at least an additional $2 billion to $3 billion annually.” From 2014 to 2020, those additional costs could therefore range anywhere from $14 to $21 billion.

In sum, the costs of the Medicaid expansion will be far beyond what anybody has estimated. For a state like California, the costs could be tens of billions of dollars by 2020. And for states in such fiscal dire straits, like California, New York, Arizona, and others, that is the difference between solvency and insolvency.

Therefore, these new costs will be more than the states can bear, which is why at least eleven states are suing in federal court over the costs involved, according to Bloomberg News. The suits will need the support of the American people, and a little bit of luck in the federal courts, to be successful. For, if they are not, and the legislation is not repealed entirely, the states will likely be bankrupted.

Americans for Limited Government is dedicated to putting the principles of limited government into action. They work with local groups across the nation to promote freedom, limited government, and the principles of the U.S. Constitution. Their goal is to harness the power of American citizens and grassroots groups in order to put the people back in charge in states across the country.