'Entitlement Programs' and 'Fiscal Cliff' Talks - Shouldn't Obamacare be Included Since Medicaid Expansion Will Cost $800 Billion in Federal Taxes and $8 Billion in State Taxes in the First 10 Years

"Republicans understand that we must avert the fiscal cliff and have laid out a framework to do so that is consistent with the 'balanced' approach the president says he wants," Boehner's spokesman Brendan Buck said. Buck accused some Democrats of ruling out "sensible spending cuts," notably overhauls of popular entitlement programs such as Medicare, the government health care plan for seniors, and Medicaid, a state-federal program that provides health care to low-income Americans. [Source]

Durbin Wants No Entitlements in ‘Fiscal Cliff’ Deal

November 27, 2012

ABC News - Medicare and Medicaid savings should be part of future debt-reduction efforts, but not on the table in talks regarding the impending “fiscal cliff,” the second-highest ranking Democrat in the Senate said.

In the prepared remarks of Sen. Richard Durbin’s speech today to the liberal Center for American Progress, he writes that progressives cannot “pretend” the programs can “continue forever” without changes to ensure their solvency. But the majority whip from Illinois insists that any adjustments should come after the immediate budget is passed.

“Progressives should be willing to talk about ways to ensure the long-term viability of Social Security, Medicare and Medicaid,” it reads. “But those conversations should not be part of a plan to avert the fiscal cliff.”

During the event, the Illinois lawmaker skipped over that section of his notes, which were released to the media, but told reporters that he stood by every word.

“We can’t be so naive as to believe that just taxing the rich is going to solve our problems,” he told the crowd, adding that his caucus needed to be open to issues “painful and hard for us to talk about.”

Durbin said he continued to be opposed to some conservative proposals, including voucher programs for Medicare and a block-grant system for Medicaid. But he also maintained he’s wary of raising the eligibility age for the safety-net programs, for fear of creating coverage gaps. President Obama floated that idea last year.

The statements offer a window into what might be congressional Democrats’ proverbial “line in the sand” as each party sharpens their negotiating teams. Both sides must reach a budget agreement by Dec. 31, or else trigger the $607 billion in automatic tax hikes and spending cuts economists agree would plunge the economy back into recession.

Some members of Congress see the talks as an opportunity to reduce the national debt, and it has become a central talking point as the deadline draws closer.

Members of both parties discussed cuts to entitlement programs earlier this month in a meeting with Obama as a way to bring about deficit reduction. According to the Office of Management and Budget, the sum total of US entitlement programs — including Social Security — make up a projected 62.4 percent of the federal budget in 2012.

Medicaid expansion to cost states $8 billion in first 10 years: Study

November 27, 2012

The Ticket - As governors ponder whether to expand their Medicaid programs to cover millions more low-income people under the federal health care law, a new study claims that states that hold out won't necessarily save that much money.

President Barack Obama's health care law asks states to expand their Medicaid programs—often the biggest line item in state budgets—to cover all residents whose incomes place them at or near the poverty line. (Most states' Medicaid programs currently cover only low-income children and their mothers.) In June, the Supreme Court ruled that the federal government couldn't financially punish states that opt out of the expansion, giving governors the opportunity to say no.

After the ruling, the governors of eight states, most of them in the South, have announced they will not participate, while governors in five more states have said they are leaning toward not joining.

But a new study by the Kaiser Family Foundation finds that on average, states won't save that much money by opting out. That's because the federal government is picking up most of the tab for the expansion, and also because states' Medicaid rolls will expand significantly even if they don't sign on since the law encourages more eligible adults and children to enroll.

If all 50 states states agree to the expansion, about 21 million new low-income, uninsured people are expected to enroll in the program at a total cost of $76 billion, the study says. If no states participate, an additional 5.7 million people will still join states' Medicaid rolls at a cost of $68 billion, because the law will encourage all eligible people to sign up. If all states participate, collectively they'll spend just $8 billion more than if they all opted out. (The study also estimates that $18 billion would be saved in uncompensated care under the expansion, but much of that savings would go to local governments, not states.)

The total cost of the Medicaid expansion will be $1 trillion over 10 years, with the federal government picking up 93 percent of that tab. After 2020, states will have to pay for 10 percent of the new Medicaid costs.

The costs varies widely state to state, which may explain some governors' wariness of the program. A handful of states (Connecticut, Delaware, Iowa, Massachusetts, Maryland, Maine, New York and Vermont) that have already expanded their Medicaid programs will actually save money under the new plan, because the federal government will offer higher matching funding. But the rest of the states will see their Medicaid costs go up by as much as 11 percent. On average, states' Medicaid spending will go up by 3 percent over 10 years if all states decide to participate.