Unfunded Mandates

One of the most serious concerns regarding the economy is the ultimate costs of the health care bill. To those unfamiliar with Washington the legislation just mandates the controlling governmental agency to write the administrative law implementing the bill. Just reading a bill tells you truly little. It is what gets mandated by the administrative process which causes the ultimate concern. Then the courts get in and that is when things get interesting. But the courts are for another day.

In a recent Kaiser posting they speak of the start of the game with Medicaid funding. The Bill mandates greater Medicaid funding but the cost is on the states except for the current Stimulus hand out which is really just more debt.

As Kaiser states:

The funds, which upped the federal contribution toward the cost of Medicaid, were first authorized using stimulus dollars. The higher matching rate was originally slated to expire at the end of 2010, but lawmakers interrupted their August recess to approve an extension of enhanced funds, albeit at a lower rate, through June 2011. While states got an increase of 6.2 percent in the federal match for their Medicaid programs using the stimulus dollars, they will see only a 3.2 percent match increase in the beginning of 2011 before it drops to 1.2 percent in April and eventually ends in June.

But the Governors are questioning and to induce them to agrees with the administration the Secretary of HHS is telling them to "fish or cut bait", take the money on Washington's terms or pay out of your own pocket. As the Secretary states:

Last week, President Obama signed into law the Education Jobs and Medicaid Assistance Act, which will provide states and territories with an estimated $16.1 billion to support their Medicaid programs. This new federal funding can stave off the deep cuts to Medicaid that many had feared, and sustain jobs in hospitals, health centers, and communities across the country. They will also support Title IV-E foster care programs. These funds are only available for your state if you request them within 45 days of enactment, or by September 24, 2010.

That also means take the terms. As Kaiser summarizes:

By telling governors they have until Sept. 24 to ask for the funds, Sebelius is forcing the hands of these officials, particularly those Republicans who have been vocal about their distaste for additional deficit spending. Initially, many governors, Republicans and Democrats alike, urged Congress to approve the extension of the enhanced match, but some Republican governors, such as Minnesota’s Tim Pawlenty, roundly criticized the funding. Others, such as Mitch Daniels of Indiana, and Haley Barbour of Mississippi, initially signed a letter with 40 state executives asking for this Medicaid assistance, but later changed their position. That's not to say they won't take the money: A Daniels spokesman told the Fort Wayne Journal Gazette that the governor will cash any check the federal government sends Indiana. Barbour, however, says he doesn't want the money, The Hill reported.

This is like forcing the use of heroin and paying you to use it then complaining when you become addicted. These Federal handouts end soon, or must, as we have already shown in the CBO analysis. However the states will be left with the costs. So if you think Federal taxes will rise just wait for the state costs.

This is just the beginning.