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CJ Reports: How long can Medicaid expansion last?

This week, Carolina Journal’s Julie Havlak reported on this question:

“How sustainable is the Medicaid program, really?”

Some lawmakers believe, since the federal government covers so much of the bill, Medicaid expansion is a no-brainer, but that may not be true. Havlak writes:

“Read my lips: There is no state funding. Why is that? It is because the feds fund 90%,” Rep. Donny Lambeth, R-Forsyth, said in the Health Committee. “There is no local cost.” 

At least not yet, critics say. Weighing the federal debt, they doubt the federal government’s ability to keep its promise to pay 90% for long. 

…Medicaid is slimmer than Medicare, but as a means–tested program it’s also much more vulnerable to budget cuts, said Heritage Foundation expert Romina Boccia. The Congressional Budget Office has already recommended lowering the federal match rate as one way to combat the rising $22 trillion national debt. 

Even if the federal government continues to foot the majority of the bill, there is still cause for concern at the federal level. Havlak writes:

[W]hile there may not be a local cost, there’s certainly a federal cost. The federal debt has already climbed to 78% of the gross domestic product — reaching heights not seen since shortly after World War II. 

Thirty years out, the outlook is even more bleak. The CBO expects the debt to be 144% of the gross domestic product. That number is fluid, however, as even a 1% hike in interest rates could pitch that number up to 199% of GDP by 2049. 

For perspective, Greece’s debt was 146.2% of its GDP when its economy plunged so badly that only two of five of its youth 16 to 24 years old had jobs in 2013. Greece’s overall unemployment rate was more than double that of America’s during the worst years of the Great Recession. 

Havlak reports that experts do not believe the system can continue on this way:

“Uncle Sam can’t keep that promise forever,” said Duke University research scholar Christopher Conover. “Everyone knows in their heart of hearts that somebody’s got to pay for this eventually. Money doesn’t grow on trees. If we keep on running deficits year after year, that literally cannot go on forever. Even if we can’t predict when it will hit the fan, it will happen at some point.” 

…“If the question is whether something is wrong with health care, the answer is everything,” says David Hyman, author of “Overcharged: Why Americans Pay Too Much for Healthcare.”

 “You’ve heard the phrase, throwing gasoline on the fire? Unless you reform the system in ways that make it work better, dumping more individuals into the market is just throwing more money at it without actually helping people.”

Read the full article here. Learn more about Medicaid expansion here.

Brenee Goforth / Marketing and Communications Associate

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