California joins Illinois as a spendthrift state

Ian Tuttle:
California’s Medicaid-Spending Crisis

On Tuesday, the Los Angeles Times editorial board accused Republicans of planning to “slash” Medicaid and “devastate” Los Angeles County, where 40 percent of the population are Medicaid recipients. Their projection reflects a sentiment shared by many across the state. About 14 million Californians — more than one-third of the state — are Medi-Cal recipients (nearly 19 percent of the nationwide Medicaid population), and the nearly $100 billion program is two-thirds funded by the federal government. What will happen if California has to shoulder more, or most, of that burden?
California’s Medicaid program has, by a certain metric, been a success. That metric is health-insurance coverage. The Affordable Care Act offered generous financial help to states that expanded their Medicaid programs, and California was one of the most aggressive adopters. Since 2014, when the ACA went into full effect, California has added 5 million people to the Medi-Cal rolls, 3.7 million of them under the ACA’s expanded eligibility criteria.

This was an “explosion” that no one expected, including the state’s health-care officials, and it made what was an obviously expensive undertaking debilitatingly costly. According to the National Association of State Budget Officers, more than one-third of California’s total expenditures last year were on Medicaid; only Indiana (35.9 percent), Pennsylvania and Missouri (37.2), and Ohio (37.7) spent at higher rates. In 2010, California was at just 19 percent. It should come as no surprise that California’s average Medicaid spending (state and federal) increased by 11 percent annually from 2010 to 2014, one of the highest rates in the nation.
There is much more.

California is another state that has over promised its pension recipients and now its Medicaid program.  The result is it is a rich state that is poor because it has mismanaged its budget worse than a sailor on liberty.  It is another blue state that has outspent its resources and is looking to the rest of us to bail it out.

In contrast, Texas refused the Medicaid expansion under Obamacare for this very reason.  It knew it would be more costly and the money from Washington would be inadequate to deal with the total costs.


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