Earlier this week, Governor Perry announced that Texas would not be setting up an ObamaCare exchange, and would not participate in ObamaCare’s Medicaid expansion. In fact, Perry is the sixth governor to opt out of these two provisions. In yesterday’s Washington Times, Perry argued that both the exchanges and the Medicaid expansion represent “brazen intrusions into the affairs of states.” As I said recently, the states can defeat ObamaCare if enough of them refuse to implement its provisions.
The usual suspects, including the New Republic, are blasting Perry for the sin of turning down “free” money from Uncle Sam. After all, the federal government is picking up 100% of the costs of the Medicaid expansion, right?
Not exactly. Uncle Sam will pay none of the administrative costs associated with adding millions of people to the Medicaid rolls. Yes, the federal government will pay 100% of the additional Medicaid benefits for 3 years. And then 90% for the next 7 years. But after 10 years are up, there’s no guarantee of any further federal funding. And you can bet that if Congress re-ups after 10 years, it will attach yet more strings to any further funding. That’s the insidious nature of the federal grants: you get the states hooked on them, and then you layer on more and more conditions.
And there’s the even more fundamental objection made by Perry: “this “federal money” is being printed out of thin air – racking up trillions of dollars of debt on the backs of our children and grandchildren.”
As for the exchanges, as I said in my recent post, ObamaCare has no viable mechanism to force states to set up healthcare exchanges. The law seems to assume that the states would willingly play along. Oh well, 44 more states to go.