Medicaid Expansion and Hollow Promises

by Charles Katebi

Supporters of Medicaid Expansion, including Governor Matt Mead, express an unwavering belief that the federal government will actually fund this entitlement as promised. Yet Washington's promises often become unfunded mandates. Even before the end of this year it is likely that Congress will cut federal funding for Medicaid Expansion and leave states holding the bag.

If Wyoming expands Medicaid, the federal government promises to cover 100 percent of its costs in 2016, and then 90% of its costs afterwards. But considering our growing national debt and unfunded liabilities, where would this money come from? Obamacare's faithful supporters nevertheless stand by Washington's pledge, undeterred.

Governor Matt Mead reiterated his faith in the federal government by calling on Wyoming's legislators to expand Medicaid in his 2017/2018 biennium budget proposal. He said:

The federal participation in optional Medicaid expansion is estimated to result in more than $268 million in additional federal funds flowing to Wyoming. These dollars would be spent on hospitals, doctors, nursing homes, mental health centers and other providers located in communities across the state.

On being asked whether the federal government will actually fulfill its obligation, Mead said, "These are questions without clear answers."

One place to look for clarification is in history.

In 2009, President Obama's administration asked states to borrow through federally-subsidized Build America Bonds. Washington wanted states to spend more money on infrastructure projects, and these bonds offered lower interest rates than tax-exempt state bonds. States took Washington at its word, and borrowed $181 billion in these bonds.

Then in 2011, President Obama signed the Budget Control Act, cutting federal spending by $1.2 trillion over ten years, including billions owed to states under the Build America program. When these cuts went into effect in 2013, the US treasury reduced its bond subsidies by 8.7 percent, costing Wyoming over $12 million.

Even programs intended to educate children were cut by the federal government. The Budget Control Act also arbitrarily reduced education aid to Wyoming's low income and disabled children across nineteen federal programs by $6.8 million.

As for Medicaid expansion, then prominent member of the House of Representatives Paul Ryan indicated in 2013 that Washington wouldn't be holding up its end of the bargain for long. He issued a stark warning to all fifty states:

The fastest thing that's going to go when we're cutting spending in Washington is a 100 or 90 percent match rate for Medicaid. There's no way. It doesn't matter if Republicans are running Congress or Democrats are running Congress. There's no way we're going to keep those match rates like that.

Now Speaker Ryan is setting the agenda for half of Congress. Before the end of the year, he's expected to have the House vote to repeal vast swathes of Obamacare, including federal funding for Medicaid Expansion.

What is clear is that Wyoming's leaders should not be making another dubious deal with Washington that expands Medicaid.