I’ve written before about the problems with Medicaid and the enormous burden it places on state budgets. (Let’s not even get into how it underpays providers, and therefore has a shortage which has reduced access to care.) Expanding the program only makes things worse, no matter how much Congress tries to sweeten the deal — either through targeted direct subsidies (Cough! Louisiana! Cough!) or by having the federal government pay a higher percentage of a state’s costs for a set time frame.
A great new study from the Heritage Foundation points out another very real possibility, however – that states will opt out of the program entirely because of the overwhelming costs and loss of sovereignty. As Dennis Smith and Ed Haislmaier write, “Faced with becoming merely an agent of the federal government, states will likely take the rational and reasoned approach of simply ending the state-federal partnership known as Medicaid.”
I’ll see your opt-out provision gamble, Senators, and raise you one more.