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Medicaid Blows Up State Budgets

The unsustainable course of American health expenditure is placing growing pressure on state budgets from one end of the country to the other.  The Washington Post has the story:

The Fiscal Survey of States says that even as states struggle with tepid revenue growth, they will be called on to spend more because of the economic distress caused by continued high unemployment…

Officials say the fiscal pressure that Medicaid puts on states is expected to increase when the federal health-care overhaul takes effect in 2014…

States are also struggling to meet the needs of local governments. Many states cut aid to localities during the recession, and many of them want it restored.

State spending on Medicaid increased, on average, a whopping 29 percent this year. That cost looks set to increase, and there is no money to pay for it. The new health care law that supporters argued would solve these problems appears to be making them worse.

This can’t go on forever, and it won’t.

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  • Jordan

    “This can’t go on forever, and it won’t.”

    Nor will AMR pensions in large measure either unfortunately.

    Just keep in mind when it stops going on forever, it stops very suddenly and very painfully.

  • Toni

    “This can’t go on forever, and it won’t.”

    A masterpiece of brevity! The Blue Social Model’s fatal flaw captured in eight words.

    As a recovering progressive, I can say the second step in this recovery program is to recognize that conservatives aren’t all selfish, greedy and/or uneducated folks. Many are very well-educated people who have come to understand that the Blue Social Model hasn’t actually served the least among us very well.

    In the early days, it did, via housing codes and laws which protect worker safety, ban child labor, and mandate education. But then it went further and defied what Christians should understand as the law of human nature. That is, we are all flawed, we are all susceptible to temptation, and we always will be. Human beings are not perfectible.

    To give more aid to single mothers than to married ones — as Great Society programs did — was to encourage the breakup and, indeed, the prevention of marriages. To give more welfare aid to mothers as they had more babies was to encourage them to have more babies they couldn’t support. To give continuous disability aid to addicts — as Americans with Disabilities Act aid originally was — is to enable addicts to stay addicted.

    More recently, the effect of the idea of Too Big to Fail is to encourage American financial firms and automakers — and recently, large European countries — is to enable them to continue self-destructive behavior.

    Too Big to Fail was never part of the Blue Social Model, but the moral hazard is the same. The more you subsidize unhealthy behavior, the more of it you get.

    May God grant us the wisdom to dismantle these unhealthy temptations without worsening the plight of the least among us.

  • Corlyss

    “This can’t go on forever, and it won’t.”

    A worthy prediction, but what exactly in past behaviors sustains your faith? The reckoning has been put off for 80 years. I remain hopeful.

  • dearieme

    “This can’t go on forever, and it won’t.”

    But it can go on for far longer than you’d think. cf Keynes: “Markets can remain irrational a lot longer than you and I can remain solvent.”

  • Medicare recipient

    To control the cost of medical care there must be rationing, although no one wants to talk about it. Rationing can be accomplished by government fiat or by the market. I would prefer the latter, as I think most people would. Why aren’t any of the challengers to President Obama pointing this out?

  • DocinPA

    To control medical costs, patients MUST perceive a cost to their health care. For instance, if everybody had health savings accounts, out of which all of their medical expenses were paid and after which catastrophic coverage progressively kicked in, there would be far less consumption of services, especially if one could keep the money tax free or roll it over. I would have far fewer people in my ER for snotty noses and chronic back pain. It’s worked in Indiana and it would work everywhere else. We don’t need rationing. We need a free market. (And I’d get paid a lot less, too.)

  • Carly EngageAmerica

    Florida’s Medicaid Reform Pilot has been a decided success, improving the health of enrolled patients, achieving high patient satisfaction and keeping cost increases below average. Since then, Florida has passed its Statewide Reform, which promises to extend these benefits throughout the state. If Florida’s Medicaid Reform Pilot experience were replicated nationwide, the outcomes in almost every facet of the program would be significantly improved and would offer participants meaningful reforms to a system that has been falling into decay, says Tarren Bragdon, of the Heritage Foundation. The pilot program, which was isolated to five counties in Florida, saved an estimated $118 million per year, with an aggregate estimated annual savings of $901 million when the reform is put in place statewide. Researchers suggest that if a similar program were to be put in place nationwide, it would save $28.6 billion annually. The pilot program’s results can be fairly projected on the nation as a whole because the program served a diverse population of 2.93 million, which includes 290,000 Medicaid recipients (

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