“The top-down federal approach to health care reform assaults the traditional state role in insurance regulation, squashes innovation, and undermines real choice and competition. PPACA is thus a bad deal for states, reducing them to mere agents of federal health and insurance policy. They could not make full use of their comparative advantages in coping with very different insurance markets, mending the safety net care for the poorest and most vulnerable of their citizens with new policies, or undertaking imaginative reforms without getting a permission slip from Washington.”

“Roughly half of the anticipated gains in insurance coverage from the Patient Protection and Affordable Care Act (PPACA) are achieved through a massive expansion of Medicaid, the joint federal–state health insurance program for the poor. The Medicaid program, with its soaring price tag and dubious level of care for recipients, is in serious need of reform, not expansion. Increasing enrollment in this program by a third is a major flaw of the new health care law.”

“Once ObamaCare becomes fully effective in 2014, the cost of newly eligible Medicaid enrollees will be almost fully covered by the federal government through 2019, with federal financial support expected to be extended thereafter. But ObamaCare provides states with zero additional federal financial support for new enrollees among those eligible for Medicaid under the old laws. That makes increased state Medicaid costs from higher enrollments by ‘old-eligibles’ virtually certain as they enroll into Medicaid to comply with the mandate to purchase health insurance. This study estimates and compares potential increases in Medicaid costs from ObamaCare for the five most populous states: California, Florida, Illinois, New York, and Texas.”

“Florida officials have joined a growing number of states and companies seeking waivers from the new medical-loss-ratio requirements imposed by the federal government under President Obama’s health care law.”

“The current Medicaid program is arguably the worst health insurance plan in the country. It has expanded massively beyond the original intent in 1965 and is now one of the two or three largest budget items for nearly every state. In spite
of massive annual increases in spending, Medicaid chronically experiences budgetbreaking costs. Expanding Medicaid, as the new health care reform law requires,
will only compound these problems.”

“Under the 136-page rule, the federal government will now decide what counts as an ‘unreasonable’ rate increase, and HHS Secretary Kathleen Sebelius wrote to Governors yesterday urging them ‘to prevent unjustified and excessive health insurance premium growth.’ Apparently, ‘unreasonable’ means rate increases that exceed 10% next year, except when it doesn’t. If an insurer crosses this arbitrary threshold, ‘The review process would then determine if the increase is, in fact, unreasonable.’ So that’s cleared up.”

“Already, Medicaid is the second largest item on the average state budget at 21% (education is first at 22%). But according to the Centers for Medicare and Medicaid Services (CMS) that is all about to change very soon thanks to Obamacare. Remember, more than half of the health care coverage expansion under Obamacare is attained by placing Americans on Medicaid. CMS projects that state and local spending on Medicaid will increase 41.4% between 2010 and 2011. 41%!!!”

“The federal government is demanding that states spend precious time in upcoming legislative sessions to set up massive new bureaucracies in anticipation of spending billions of dollars to implement ObamaCare… But there are ways states can protect themselves from being swamped by these federal demands.”

“First, ObamaCare’s state-side implementation is going to be very difficult and very complex. Even big, liberal states like California are going to have trouble keeping up with the law’s requirements. Second, that complexity is going to set up a system that’s 1) going to create a lot more interdependence between the government and the private sector and 2) begging to be gamed. That’s presumably why private firms, especially in the consulting sector, are already investing heavily in staff who can explain what the government’s doing and, presumably, how to take advantage of it. “

“The healthcare reform law flunks the test of real healthcare reform. Real reform would: encourage providers to offer higher-quality care at lower costs; reduce the cost pressures that threaten to bankrupt Medicare and Medicaid; and give every American access to more options for quality insurance. To enact real healthcare reform, and help to restore fiscal balance to the nation’s budget, the next Congress should pursue substantial changes to the Patient Protection and Affordable Care Act (PPACA). We recommend the following five healthcare objectives for the 112th Congress.”