Politics & Policy

Which State Will Be the First to Abandon the Obamacare Medicaid Expansion?

(Juan Moyano/Dreamstime)

President Reagan once opined that “government programs, once launched, never disappear,” calling them “the nearest thing to eternal life we will ever see on this earth.”

Today, Arkansas is proving why Reagan’s pithy sound bite has matured into a truism. In recent days, officials came as close as any state ever has to throwing in the towel on the Obamacare Medicaid expansion, but parliamentary maneuvers by Governor Asa Hutchison — a Republican — mean he’ll likely muscle through more funding for the program.

The Arkansas fight, however, is a leading indicator of what’s to come, as lawmakers around the country discover they got more than they bargained for when they chose Medicaid expansion — and it’s poised to explode their budgets.

Arkansas — a state President Obama lost by 24 points in 2012 — reached an unprecedented agreement with the administration to accept the Obamacare expansion, but only under the condition that the newly eligible population would enroll in private health plans, theoretically in order to avoid the many well-known problems of traditional Medicaid.

They called it the “private option,” and claimed it would control costs.

RELATED: Beware Feds Bearing Gifts

Though it was hailed by the New York Times, President Obama, and even Hillary Clinton, problems mounted almost immediately. By the end of its first year in 2014, Arkansas had enrolled over 61,000 more people than the state expected to have by that point. It ran over budget every single month, and by July 2015, nearly 40,000 more people were in the program than the state had projected would ever enroll. Today, over 40 percent of the state is dependent on Medicaid.

The private option was supposed to be “budget-neutral” for the federal government, but federal auditors have calculated it will cost $778 million more than expected over just the first three years.

RELATED: The Obamacare Bait-and-Switch No One Noticed

After 2014’s bruising elections in Arkansas, it became clear that not only was expansion unaffordable, it was also unpopular. Dozens of pro-expansion legislators were defeated in 2014, including the chief architect of the private option.

So in 2015, the legislature passed and Governor Asa Hutchinson signed a bill that would end expansion on December 31, 2016, and restore the original Medicaid eligibility requirements. In March’s primary elections, the governor endorsed candidates, praising their vote to end the program.

#share#Despite the optics, though, Governor Hutchinson and several of his allies in the state legislature entered April 2016 intent on preserving the Obamacare Medicaid expansion in Arkansas. But they would have to find a way to fund the program in the fiscal session and get three-fourths of the legislature to vote in support — an important feature of the state constitution meant to protect Arkansas taxpayers from high taxes or reckless spending.

Since Hutchison didn’t have enough votes, he was determined to use parliamentary tactics to circumvent these taxpayer protections. Through a complex series of votes, Medicaid expansion is likely to survive in Arkansas, for now.

RELATED: The Latest Problem under the Affordable Care Act: Deductibles

But the budget scuffle has highlighted the harsh fiscal reality emerging in the Obamacare Medicaid-expansion program — and these lawmakers will have to own it. Beginning next year, Arkansas is obligated to share 5 percent of the program’s cost. Doing this would account for a whopping 60 percent of the year-over-year growth in the state’s budget. With a 10 percent state match on the horizon — coupled with the program’s over-enrollment, cost overruns, and waste, fraud, and abuse — Medicaid expansion will devour Arkansas’s budget over the next ten years.

The budget picture is similarly bleak in other states that took the plunge. Only 18 months into Ohio’s expansion, the state’s total Medicaid costs nearly doubled, to $4.05 billion. By next year, Buckeye taxpayers will be on the hook for over $130 million to meet the 5 percent state match, more than double the projected $55.5 million.

It’s clear that Medicaid expansion will begin swamping state budgets, and it’s inevitable that states will have to find ways to prove the Gipper wrong.

#related#One compromise the Obama administration approved for a 2011 eligibility expansion was to freeze new enrollments and allow the program to end through natural attrition as enrollee incomes grew. Several states, like Arizona, Maine, and Delaware, exemplify how this approach can work without abruptly kicking anyone off their insurance — as Obamacare has already done to millions.

Whatever the solution, as President Reagan attested, ending a government program is no small feat. But the Arkansas tremor signals that it’s only a matter of time. Elected officials must begin backing out of government programs like Medicaid expansion before they cripple us. Even in government, there can be no such thing as eternal life.

Most Popular

Elections

Put Up or Shut Up on These Accusations, Hillary

Look, one 2016 candidate being prone to wild and baseless accusations is enough. Appearing on Obama campaign manager David Plouffe’s podcast, Hillary Clinton suggested that 2016 Green Party candidate Jill Stein was a “Russian asset,” that Republicans and Russians were promoting the Green Party, and ... Read More
Politics & Policy

Elizabeth Warren Is Not Honest

If you want to run for office, political consultants will hammer away at one point: Tell stories. People respond to stories. We’ve been a story-telling species since our fur-clad ancestors gathered around campfires. Don’t cite statistics. No one can remember statistics. Make it human. Make it relatable. ... Read More
National Review

Farewell

Today is my last day at National Review. It's an incredibly bittersweet moment. While I've only worked full-time since May, 2015, I've contributed posts and pieces for over fifteen years. NR was the first national platform to publish my work, and now -- thousands of posts and more than a million words later -- I ... Read More
Economy & Business

Andrew Yang, Snake Oil Salesman

Andrew Yang, the tech entrepreneur and gadfly, has definitely cleared the bar for a successful cause candidate. Not only has he exceeded expectations for his polling and fundraising, not only has he developed a cult following, not only has he got people talking about his signature idea, the universal basic ... Read More
Culture

Feminists Have Turned on Pornography

Since the sexual revolution of the 1960s, the feminist movement has sought to condemn traditional sexual ethics as repressive, misogynistic, and intolerant. As the 2010s come to a close, it might be fair to say that mainstream culture has reached the logical endpoint of this philosophy. Whereas older Americans ... Read More
White House

The Impeachment Defense That Doesn’t Work

If we’ve learned anything from the last couple of weeks, it’s that the “perfect phone call” defense of Trump and Ukraine doesn’t work. As Andy and I discussed on his podcast this week, the “perfect” defense allows the Democrats to score easy points by establishing that people in the administration ... Read More
Elections

Democrats Think They Can Win without You

A  few days ago, Ericka Anderson, an old friend of National Review, popped up in the pages of the New York Times lamenting that “the Democratic presidential field neglects abundant pools of potential Democrat converts, leaving persuadable audiences — like independents and Trump-averse, anti-abortion ... Read More
PC Culture

Defiant Dave Chappelle

When Dave Chappelle’s Netflix special Sticks & Stones came out in August, the overwhelming response from critics was that it was offensive, unacceptable garbage. Inkoo Kang of Slate declared that Chappelle’s “jokes make you wince.” Garrett Martin, in the online magazine Paste, maintained that the ... Read More