Wednesday, December 02, 2009

ObamaCare Negative Effects on States--Passing on the Expenses to YOU!

Obamacare supporters keep talking about how they will manage costs and money spent by the federal government. One way to do that will be to place HUGE AND UNSUSTAINABLE burdens on states regarding medicaid eligibility. Check out this info from
The “health-care reform” bills in Congress would hit 39 states hard with new expenses, by raising Medicaid eligibility above the current income cutoffs.

The only states that won’t have to raise eligibility because of the Senate bill are Connecticut, Illinois, Maine, Massachusetts, Minnesota, New Jersey, New York, Rhode Island, Tennessee, Vermont and Wisconsin (plus the District of Columbia). And the House bill would force even Massachusetts and Vermont to pay more.

Hardest hit would be Texas ($2,750 million a year in extra state spending under the Senate bill), Pennsylvania ($1,450 million), California ($1,428 million) and Florida ($909 million). Who knows if Florida could avoid imposing an income tax if it has to meet so high an unfunded mandate?

Landreiu: May vote to impose massive Medicaid costs on her state.

Landreiu: May vote to impose massive Medicaid costs on her state.

The required increases in state spending are likely to be quite high in some states whose senators are swing votes on ObamaCare:

* In Arkansas, home to swing Sens. Mark Pryor and Blanche Lincoln, the annual increased state spending would come to $402 million (not counting the federal share) — about a 10 percent increase in the state budget, which is now $4 billion a year.

* In Louisiana, whose Sen. Marie Landrieu sold her vote on a key procedural motion in return for more Medicaid funding, the increase would come to $432 million (a 5 percent hike in state spending) — more than wiping out the extra funds she got in return for her vote.

* In Sen. Evan Bayh’s Indiana, spending would go up by $586 million a year, a rise of 4 percent.

* In Sen. Ben Nelson’s Nebraska, the added state spending would be $81 million a year, a 2 percent increase.

The Sebate ObamaCare bill would cost North Dakota, home of Sens. Kent Conrad and Byron Dorgan, $14 million. South Dakota, represented by Sen. Tim Johnson, would have to boost Medicaid spending by $33 million.

The Medicaid-expansion provisions of the Senate bill are complex. In the first year of the program (2013), states must enroll anyone who earns less than 133 percent of the poverty level in their programs. For a family of four, the national average poverty level in 2009 is $22,000 a year. So any family that size that makes less than $29,000 would be eligible for Medicaid.

Many states, particularly in the South, actually have Medicaid cutoffs below the poverty level. Arkansas, for example, cuts off its Medicaid eligibility at only 17 percent of poverty level, and in Louisiana it goes up to only 26 percent. For these states, the spending increase required by the new bill is huge.

For the first three years of the program (2013-15) the federal government would pay for all of the costs of the Medicaid expansion. But, starting in the fourth year of operation — 2016 — the average state would be obliged to pay 10 percent of the extra cost.

For Democratic governors, this provision means sudden death. Particularly in states with limited Medicaid coverage, it would require huge tax increases.

Yes, the federal government will be passing on the debt to the states, who will pass it along to you in the form of more fees and taxes. Woohoo!

So, the question is, how much will state taxes go up? Again, I turn to Dick Morris:
The Obama health care initiative will be the biggest unfunded federal mandate on the states in history. It will force dozens of states, particularly in the South, to abandon their low tax ways and to move toward dramatically higher rates of taxation. It may even force Florida and Texas to impose an income tax!

In the Senate version of the bill, states must expand their Medicaid eligibility to cover everyone with an income that is 133% of the poverty level. The House bill brings it up to 150%. But a host of states have kept their state taxes low precisely by so limiting eligibility for Medicaid that it essentially is only for seniors needing long term care and not for poor younger people who require acute care.
For the first three years of the program (2013-2015) the federal government would pay for all of the costs of the Medicaid expansion. But, starting in the fourth year of operation — 2016 – states would be obliged to pay 10% of the extra cost.

While Obama has often spoken about how he won’t raise taxes on the middle class, his health care legislation will require the governors to do so. Particularly in those states with Democratic governors, it is easy to see how the backlash against these new taxes could fundamentally alter state politics.

Alabama = 394 million

Alaska = 39 million

Arizona = 217 million

Arkansas = 402 million

California = 1,428 million
Indiana = 586 million

Kentucky = 199 million

Michigan = 570 million

Ohio = 399 million

Think it sucks to live and work and run a business in Ohio now? Imagine when these tax hikes take effect!!!!