A new analysis by the American Action Forum has found that the Supreme Court's Obamacare ruling will stick taxpayers with hundreds of billions in new costs to implement President Obama's healthcare exchanges.
The reason: states who decide to dump Medicaid beneficiaries will shift the cost for insurance subsidies to federal taxpayers.
From the report:
Suppose that every state takes advantage of this opportunity, and
that every individual who is either on Medicaid or would be eligible for
the expansion actually moves to the exchanges. The federal government
would save as much as $130 billion in Medicaid in 2014, but it would be
on the hook for $230 billion in new insurance subsidies. The net bottom
line: a $100 billion annual expansion in federal costs.
The American Action Forum is quick to point out that not all states will likely make the leap. However, even if only a portion choose to, the costs overs 10 years will be astronomical:
Of course, not all states may forego the expansion, without doubt
fewer than 100 percent of those eligible will take up subsidies, and
actual insurance choices are impossible to foresee perfectly.
Accordingly, the net cost will be lower than the full $100 billion, but
it seems safe to say that the ACA will leave the taxpayer on the hook
for an additional $500 billion or so in federal costs over the first 10
The new costs may only add fire to voters' discontent with Obamacare. Indeed, as the New York Times reported this week, as of a month ago, only 34 percent of Americans said they supported Obamacare's passage.