Medicaid Expansion Cost.

As proponents attempt to convince states that the cost of the Medicaid expansion will be covered by the federal government, the facts remain the same. To start with, the enhanced match is only for the expansion population, not the existing Medicaid population. In addition, it does not apply to administrative costs, which add about 5 percent to benefit payments. Finally, the full 100 percent enhanced match is temporary, with states picking up 10 percent of the new costs in 2020 and thereafter. Jack McHugh MAC Center At a time when Medicaid is already overwhelming current state budgets, it would be counter- productive for states to voluntarily add to those liabilities. In addition, there are numerous other cost pressures states need to consider when assessing the expansion. First, states will see increased enrollment among the nonexpansion population as the law also expands eligibility by changing how income is measured and corrals those eligible, but not enrolled, into the program. Second, states will face pressure from their hospitals to backfill $18 billion in federal payment cuts for uncompensated care. Third, the PPACA lifts Medicaid reimbursement for primary care physicians to Medicare levels, with federal funding of the differencebut only for two years. Once the federal funding expires, states will face pressure to maintain those levels and to increase payments to other physicians accept-ing Medicaid. Moreover, regardless of HHSs recent claim that it has backed away from previous proposals to shift Medicaid funding to a blended rate, the fiscal challenges facing Medicaid at the state and federal level make future financing adjustments to Medicaid unavoidable. Jack McHugh MAC Center Control. While the HHS Secretary has touted offering flex- ibility to the states, the law and HHS regulations offer states no meaning- ful policy discretion. Specifically, the law extends the maintenance of effort (MOE) restriction from the stimulus law that prevents states from making key changes to their Medicaid programs. Moreover, the recent HHS decision to eliminate any possibility of a state expanding its Medicaid program short of the 138 percent federal poverty level (FPL) further underscores that flexibility was more talk than action. Coverage.

Medicaid is inferior health care As with the exchanges, proponents stress the importance of Medicaid in expanding cover- age. Unlike the federal default in the exchange, there is no federal default for the Medicaid expansion. However, rather than throwing more people into a broken program, states should focus on improving the current program and developing sustainable alternatives for meeting the needs of the proposed expansion population. Fighting Back to Minimize the Damage of Bad Decisions Sometimes opposing bad policysuch as by declining to run exchanges or expand Medicaid while important, is not enough. In those instances, lawmakers need to work to minimize the impact of bad policies that they are unable to fully reverse. They also need to insist on transparency, accountability, and a level playing field, so as to create public awareness of the true consequences of bad policies and build support for future reforms. Still a Risky Proposition for the States Enormous uncertainty still surrounds the health care law. With less than one year remaining before the major provisions of Obamacare take effect, it is no surprise that barely more than one-fifth of states have publically agreed to both establish a state exchange and expand their Medicaid Heritage Fiundation As far as Medicaid I think it would be appropriate to point out the original govt projections on how much that was going to cost and how much it really ended up costing! History always repeats itself with these govt programs because nothing is ever learned from it. Here is a timeline going to 2009 http://www.kff.org/medicaid/timeline/pf_entire.htm This is from an paper (attached) from 1988 however, When Medicaid was enacted, its major purpose was to consolidate several grant programs that already were administered by the states. It was believed initially that Medicaid would add only $250 million to the health care expenditures of the federal government.3 Exhibit 1 depicts the growth in Medicaid expenditures over the past twenty years. In the first year of operation, the combined federal and state outlays were $1.5 billion. By 1975, spending had increased to $14.2 billion, and in 1987 the expenditures exceeded $47 billion.4 Enrollment has increased as well. In 1968 there were only 4.5 million recipients. Enrollment peaked at 24 million in 1977 and since has dropped to approximately 23.2 million in 1987. Medicaid currently accounts for over 10 percent of our nations total health care expenditures. According to the Kaiser Health Foundation Medicaid and CHIP stats Michigan has 20% of her total population enrolled in Medicaid (2009) Michigans Medicaid spending from 1990 -2010 has increased 8% ranking her as 23rd in the nation for Medicaid spending. In contrast our Midwestern neighbors Indiana has increased 5% and Illinois 6.6%

The state of Michigan spend $3,153,326,988 (2010) compared to $1,454,600,107 in Indiana and was the 9th highest in the country Michigan took NO pro-active containment actions for eligibility requirements BEFORE Affordable Care Act (ACA) regulations became law (Maintenance of eligibility requirements enacted as part of the Affordable Care Act (ACA) prohibit states from imposing eligibility and enrollment standards for Medicaid and CHIP that are more restrictive than those that were in place at the time the ACA was passed (March 23, 2010) Michigan has taken NO Medicaid Cost Containment Actions in 2012 or 2013 in areas where they could, such as LTC: Cost containment initiatives for long term care services. In Pharmacy Cost Containment Actions, Michigan has only implemented three of seven possible containments