The Wall Street Journal - ObamaCare Will Punish State Budgets

Op-Ed

By Senators Mike Johanns, Lamar Alexander, John Hoeven, and Jim Risch

Two years after ObamaCare was signed into law the American people are more opposed to it than ever. It is now clear that the law will impose heavy burdens on state and family budgets and increasingly possible that its mandate that all Americans purchase health insurance or face penalties will be ruled unconstitutional. As lawmakers, we need to repeal the law and do what we should have done in the first place: go step by step to reduce costs so that more people can afford insurance.

When the Senate was voting on the health-care bill in 2010, we suggested anyone who voted for it ought to serve as a governor and actually try to implement its new mandates and costs. That's the real trick--implementing a more than $2.5 trillion bill that increases costs in a health-care system that is already too expensive, and doing so when state budgets have been roiled by recession.

The National Governors Association (NGA) reports states are facing a collective $95 billion budget shortfall this year alone. But ObamaCare's expansion of Medicaid will force an additional $118 billion in unfunded mandates onto the states through 2023.

The National Association of State Budget Officers says Medicaid now comprises nearly one quarter of states' entire budgets. Each one of us has served as governor in our state and knows that increased costs in one area means less money in another. America's families know this as well since they can't just print and borrow money when their spending goes up like the federal government does.

Yet, astonishingly, more than half of ObamaCare's newly promised health-insurance coverage was accomplished by assigning nearly 26 million more people to an already broken Medicaid program and telling governors, "Now, you find a way to help pay for it."

This will leave states with two choices, or a combination of both: either cut funding in areas such as K-12 education, public universities and colleges, veterans affairs programs, and other much-needed services; or raise sales, income or property taxes.

As Nebraska Gov. and NGA Chairman Dave Heineman said in February, "The overall fiscal condition of states has improved, but governors are very concerned about the growth of Medicaid as it consumes an increasing share of state budgets. Medicaid's rapid growth could result in less funding for education, transportation, or public safety." Indeed, in just three years the annual budget shortfall created by the new Medicaid mandate will already be greater than the entire Nebraska State Patrol's approximately $50 million budget.

Tennessee's previous governor, Democrat Gov. Phil Bredesen, has called ObamaCare "the mother of all unfunded mandates," estimating that it would cost Tennessee an additional $1.1 billion from 2014 to 2019, even with the federal government covering the Medicaid expansion for the first three years.

The North Dakota Department of Human Services reported that the expansion will increase the number of beneficiaries on the state's Medicaid rolls by 50%, and is expected to cause serious access-to-care dilemmas because there aren't enough health-care providers in the state who take Medicaid to absorb the new patient load.

The same is true in Idaho, where Medicaid rolls would nearly double to include more than a quarter of the state's population. The additional enrollees would add more than $240 million in costs between 2014 and 2020. Gov. Butch Otter has repeatedly stated "big federal programs aren't the answer" and that ObamaCare "keeps states and the marketplace from making health care more affordable."

College students in nearly all states will be hit with a triple whammy. First of all, tuitions are increasing at public universities and colleges in large part because ObamaCare restricts governors from making changes to Medicaid eligibility that would reduce their state's health-care costs. Consequently, higher education is one of the first places they can cut.

College students are being hit again because the federal government took over the student-loan business in 2010, eliminating the competition. This allows the Education Department to borrow money from Treasury at an interest rate of 2.8% and lend it to college students at a rate of 6.8%. A portion of the profits from overcharging students will be used to help pay for ObamaCare.

And the third blow comes as college students graduate and enter a depressed job market where employers are creating fewer jobs as a result of the high costs associated with ObamaCare. Analysts at UBS have suggested as much when they stated in a September 2011 report that the health-care law is "arguably the biggest impediment to hiring, particularly hiring of less skilled workers."

As this week's historic debate in the Supreme Court clearly shows, the fight over ObamaCare is far from over. We and our Republican colleagues voted against the law two years ago and will continue to work toward a smarter, step-by-step solution that will make health care available to more Americans at a lower cost to the federal government, the states, and individuals seeking care.

Messrs. Alexander, Johanns, Hoeven and Risch are U.S. senators from Tennessee, Nebraska, North Dakota and Idaho, respectively. Each previously served as his state's governor.