Friday, December 18, 2009

Here Comes Mother

Now that the Medicare expansion has been stripped from the Democrats' health care legislation, we would do well to focus on the Medicaid expansion. The legislation would expand eligibility for Medicaid to those whose income equals 133 percent or less of the poverty level. According to Mississippi Governor Haley Barbour, this would add roughly 15 million people to the program. In his state, the increase could be as high as 50 percent.

Where will the money for the expansion come from? Not from the federal government. If the feds were to foot the bill, this would explode the pretense that the legislation is "revenue neutral." To keep up that pretense, the bill would leave the states to pay for the expansion after the first three years. Gov. Barbour estimates the size of that bill at $25 billion. Call it the mother of all unfunded mandates.

Most states face balanced budget laws. So unlike the feds, they cannot borrow from the Chinese or from anyone else.