Thursday, July 5, 2012

The Affordable Care Act just became unaffordable

Last week, the Supreme Court ruled that the federal government could not punish states that refused to expand Medicaid (to 133 percent of the federal poverty line) by yanking their existing Medicaid funding.

So what does this mean for states?
...beginning in 2014 they could pare their Medicaid program back to the federally-designated minimum (100 percent of poverty), saving the state a lot of money. Everybody between 100 percent and 133 percent would be eligible for insurance subsidies – with the federal government (read: taxpayer) picking up the entire tab.
For states, this is a clear winner – covering more individuals and saving budget dollars at the same time. But the taxpayers will have to pick up the full cost of the additional and generous insurance, probably about $500 billion over ten years.


  1. I don't see how this changes the costs. Either the state or federal government will cover those between 100 and 130%. How does this increase the total tax bill (federal + state)? It may even lower individual tax bills, at least in the short run, as the federal government has many more debt options, including running a deficit, that states do not.

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