State Budgets and Health Care

According to the Centers for Medicare and Medicaid Services (CMS:
"If state Medicaid spending increases by 41 percent as projected by CMS, then by next year Medicaid could end up consuming nearly 30 percent of the average state budget. Medicaid would greatly exceed all other state priorities, including education, which tops state budgets at about 22 percent. In fact, state spending on education would experience certain cuts next year.

Presumably, the state spending increase is so high because the enhancement of the federal Medicaid match will expire at the end of 2010. CMS projects that federal spending on Medicaid and the Children’s Health Insurance Program will decrease 7.1 percent between 2010 and 2011. The loss of federal funds will drive most of the increase in state Medicaid obligations.

Unfortunately, states have lost considerable flexibility to reduce Medicaid’s burden on their budgets. As a condition for receiving the additional federal dollars, both the stimulus bill and PPACA contain maintenance-of-effort (MOE) provisions that prohibit states from changing eligibility levels. "

http://blog.heritage.org/2010/12/20/how-obamacare-is-hastening-the-day-of-reckoning/

One of the promises of the Health Care "reform" is that the reform would "bend the curve" of medical costs and the Federal Government could actually provide health care to 30 million people at less cost than current. That made no sense but people bought it. And maybe it was true-Federal costs go down but state costs go up.