* Texas, California, Florida to see greatest increases
* States also worried about flexibility, communication
* 28 million uninsured people could be covered under plan
By Lisa Lambert and Donna Smith
WASHINGTON, March 1 The costs to U.S. states of
the Medicaid insurance program for the poor will grow by
hundreds of billions of dollars under the healthcare law passed
last year, according to a report released by Republicans in the
Senate and House of Representatives on Tuesday.
"This law, because of Medicaid expansions, has put a strain
on state budgets," Senator Orrin Hatch, one of the report's
sponsors, told a meeting of hospital administrators on Tuesday.
"Medicaid expansions threaten to bankrupt the states."
The report tallied state governments' estimates and found
expanding Medicaid will cost at least $118 billion nationally
through 2023. States run the program with partial
reimbursements from the federal government.
The costs would grow most for Texas, at $27 billion,
followed by California at $19.4 billion and Florida at $12.9
billion. Altogether, 15 states will pay more than $1 billion
for the new requirements.
The report comes as Republicans work to undo the law that
President Barack Obama championed to provide affordable
healthcare to all Americans. Members of Congress are
introducing bills to repeal its requirements, while more than
half of the states are challenging it in federal court.
The recession and financial crisis ravaged states' revenues
and currently their budget gaps total $175 billion. Meanwhile,
swells of unemployed people who turned to Medicaid during the
recession, industry changes and inflation drove up states'
spending on Medicaid so that it now it accounts for a third of
many of their budgets.
When states balked at expanding Medicaid enrollment for
fear of further fiscal pain, the U.S. government agreed to
cover all costs of new enrollees for the first few years of the
reform plan, and a majority of the costs through 2021.
"The cost to states over this period will be $60 billion -
just 2.6 percent more than what they would have spent on
Medicaid without health reform," said January Angeles, policy
analyst at a think tank tracking states' fiscal conditions, the
Center on Budget and Policy Priorities.
"The health reform law, by dramatically shrinking the ranks
of the uninsured, will lighten the burden on states of
providing health care to their uninsured residents," added
Angeles in her blog post.
GOVERNORS SEEK FLEXIBILITY
States are charged with carrying out key provisions in the
healthcare law, including creating insurance exchanges. Many
worry they will not receive enough funding for implementation and slow timing and regulations limit their flexibility.
Distributing Medicaid funds through grants with caps on how
much states may receive would drive down costs and increase
states' flexibility, Mississippi Governor Haley Barbour, a
possible Republican presidential candidate, told the meeting of
the Federation of American Hospitals.
"Most governors would take that in a heartbeat," he said.
"We would make Medicaid better. We would also make it less
On Monday, Obama told a bipartisan group of governors he
supports giving states more flexibility in implementing the
reform law, asked them to create a commission on shrinking
Medicaid costs, and said his administration will work to smooth
out wrinkles in communicating with states.
Massachusetts Governor Deval Patrick, a Democrat, said the
healthcare law will help his state, which established a plan
similar to the federal one under former Governor Mitt Romney.
"We see a tremendous amount of flexibility," Patrick said.
"We see some flexibility to try new things in terms of payment
delivery and payment system reforms, which is where the real
(cost) pickup is."
In a report released on Tuesday, the Robert Wood Johnson
Foundation said that if the law were fully implemented today,
about 28 million people currently lacking coverage would have
insurance. The law is set to come on-line completely in 2014.
About 12 million people would be newly eligible for
Medicaid at a cost of $54 billion nationally, said the
foundation, which tracks health policy. Of that amount the
federal government would pay about $45 billion.