At a presidential campaign stop in Indiana in 1968, Robert Kennedy was asked by a medical student who was going to pay for his healthcare proposal for poor people? Kennedy famously responded, “you will.” His answer is often seen as a courageous and brutally honest event in American liberalism.
However, when compared to today’s federal spending binge, quips like that don’t tell the whole story.
A huge portion of today’s entitlement expansion is not being paid by current taxpayers but future generations through federal deficits and our unsustainable $22 trillion national debt.
Entitlement spending such as Social Security, Medicaid, and Medicare already devours 70 percent of our $4.4 trillion federal budget after unemployment insurance and Obamacare is added to the mix. So called mandatory entitlement spending costs are skyrocketing and the U.S. finds itself again nearing $1 trillion annual budget deficits. Interest on the national debt alone will soon surpass defense spending.
Here in North Carolina, Gov. Roy Cooper and other politicians desperately want to further tie North Carolina to a debt-saddled federal government through Obamacare’s Medicaid expansion.
Part of the argument put forward by many lawmakers across the country, Republicans and Democrats alike, is the belief that if their state doesn’t rush to get the “free money” it will go elsewhere.
As healthcare policy experts like Katherine Restrepo point out: “According to the Congressional Research Service (CRS), when Congress drafted Obamacare, a pot of money was not allocated for Medicaid expansion. Rather, the reality is that an influx of federal funding would merely be adding to the federal deficit — taxing future generations and their children.”
Gov. Cooper likes to say North Carolinians are “already paying for it” when it comes to Medicaid expansion for other states through federal taxes. He’s right in a way, given that future North Carolinians, many not even born yet, are shouldering that burden. Yet, the Congressional Budget Office (CBO) has repeatedly pointed out that states that reject expansion are reducing federal spending.
The appeal for Medicaid expansion is that the federal government picks up nearly the entire tab until 2020 and then states have to kick in 10 percent. But even the Republican champion of Medicaid expansion, former Ohio Gov. John Kasich, admits this 90 percent deal will change. In a 2017 op-ed in the New York TimesKasich noted, “And states cannot expect the federal government to continue paying 90 percent of Medicaid expansion costs given our nation’s historic debt; they must accept a gradual return to traditional cost-sharing levels.” And what are those traditional cost-sharing levels for states? According to the left-leaning Center on Budget and Policy Priorities, that traditional cost-sharing averages out to around 40 percent, not 10 percent, painting a bleak future as state budgets become entirely swallowed up by Medicaid. Costs are already exploding as the price tag of expansion in Virginia will overrun estimates by $85 million in the biennium budget. Overall for Virginia, Medicaid costs unexpectedly soared by $462.5 million overall.
The rush to make states and a large portion of their citizenry even more dependent on a financially fledgling federal government is clearly unsustainable, but also immoral, particularly because major entitlement reform is the only path towards fiscal sanity for this nation.
While we have a healthcare problem in North Carolina the state should continue to explore managed care and other alternative reforms before jumping on the Medicaid expansion train that is clearly helping to send our nation and many states towards financial ruin. We all share in a moral obligation to help care for the neediest citizens, but in reality, expansion weakens our ability to do so.
Given that North Carolinians and potentially a handful of other states are about to debate signing up for the expansion of Medicaid again, there needs to be some pause and clarity over federal spending. Overall, federal lawmakers have failed miserably to even slow the spending binge.
Continuing to kick the can down the road, mortgaging the future of children and the unborn who have no say in the process is no solution. Given the continued rush towards reckless spending, it’s becoming evident that the onus is now on states like North Carolina and the citizenry to try to sound the alarm on all of this insanity.
This article was previously published in the News and Observer.