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Exploding Medicaid

Sunday December 8th, 2013   •   Posted by Craig Eyermann at 2:08pm PST   •  

medicaid2 If Obamacare (aka the “Patient Protection and Affordable Care Act”) has had any success, it has been in signing up more Americans for Medicaid—the federal government’s program for providing free health care to people with poverty-level incomes.

Or, thanks to changes mandated by the Affordable Care Act law, a large number of people whose household income is within 133% of the federal poverty limit, depending upon whether or not the state in which they live has agreed to expand their eligibility standards for Medicaid.

But that success comes with a budget-busting price. Writing in the New York Post, Michael Tanner describes the Medicaid Time Bomb:

The good news, if you want to call it that, is that roughly 1.6 million Americans have enrolled in ObamaCare so far.

The not-so-good news is that 1.46 million of them actually signed up for Medicaid. If that trend continues, it could bankrupt both federal and state governments….

The Congressional Budget Office projects that, in part because of ObamaCare, Medicaid spending will more than double over the next 10 years, topping $554 billion by 2023.

And that is just federal spending.

State governments pay another $160 billion for Medicaid today. For most states, Medicaid is the single-largest cost of government, crowding out education, transportation and everything else.

To understand just what that means for spending at the federal government level, the following chart from the Mercatus Center’s May 2013 study of Obamacare’s Medicaid expansion visualizes how much the Congressional Budget Office believes the cost of the program will grow as a percent share of the nation’s entire Gross Domestic Product from 2012 through 2037:


And the following map indicates the amount of Medicaid spending per capita for each of the United States and the District of Columbia in 2012 (an interactive version is available here):


So, imagine what having those spending levels grow by over 150% in just the next three years will do to your state government’s budget after it starts having to pay its portion of that increased spending. And remember that every state’s Medicaid program needed to be bailed out by the federal government back in 2009 when the economy was in deep recession.

Featured Image:
National Library of Medicine

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December 2013