In an Examiner interview, Michael Tanner makes an argument that conservatives should apply to any version of the bills that House or Senate Democrats will be pushing: that it will sock the already shaky finances of state governments, leading to new rounds of tax increases on households far below President Obama’s promised income floor on tax hikes:
The Democratic health care bill in the House would widen Medicaid coverage to anyone earning below 133 percent of the poverty level — about $25,000 for a family of three. The Democratic bill in the Senate would include those at 150 percent of the poverty level. Another possible Senate bill circulated Tuesday also called for expanding eligibility to anyone earning less than 133 percent of the poverty level.
While some states cover eligible people at higher incomes, the bills would for the first time require states to bring in those who could be potentially much more expensive, like the homeless and drug addicts. And while at first the federal government would pay for the expansion, the proposals eventually shift nearly half the responsibility onto the states, which already spend more than 20 percent of their budgets on Medicaid.
“This creates a huge unfunded mandate,” said Mike Tanner, a health care reform scholar at the Cato Institute, a libertarian think tank, adding that the requirement would “almost certainly” require some states to raise taxes.
This argument is a three-fer: It has Washington forcing something on the states; it has Obama breaking his tax pledge; and it sets up sectional conflict because some states will gain more than others from Medicaid expansion.