ok I knew obamacare prevented states from reducing medicaid roles and is partly the method by which Obama instends to insure those uninsured. I did not realize that the purpose of this limitation on state medicaid roles was to prevent states from cost shifting to the feds.
Assuming this obviously partisian article is accurate... you drop medicaid enrollees now (state/feds split it roughly 50/50) and in 2014 they re-enroll feds paying 100% (part of the corn husker kickback remember that Obama said don't worry we're going to offer all states the same deal).
However for obvious reasons of the economy, state budgets are destroyed and they can not reduce enrollment or they lose ALL medicaid funding (this is unbelievably huge btw). so they face a stark choice, raise taxes or cut everything else. Contributing, it should be noted that states balanced their budgets over the past 2 years mostly by taking extra medicaid stimulus dollars and I believe shifting out their state portion out of medicaid to fund other programs instead of cut. It should be noted Obama did say 2 years ago do not use this money to fill your budget holes because its a one time thing... and states did it anyways mostly to save teacher jobs.
So now AZ brewer is calling their bluff and has asked the feds to grant them a waiver. If they grant it... they blow the federal budget and the CBO cost projections. If they don't grant it... state budgets get even worse. It'll be interesting... it really becomes a high stakes game of chicken.
If I was Obama I'd grant waivers depending on how I think it would affect my electability in 2012. But thats because I'm an evil bastard. Causing pain in AZ might make them raise taxes (win) might even turn the state against the GOP in 2012 (windfall). In a heavily democratic state, grant the waiver.
Scary isn't it. Good think we've got Saint Obama in office instead of the devil GWB or a ethical egoist like me!
http://www.foxnews.com/opinion/2011/02/ ... -recovery/
"The problem is that Obamacare is written in a way that puts people who are new to Medicaid in 2014 entirely on the federal tab. So anyone dropped from the program now would return in 2014, only this time the federal government would pick up the entire cost of their care instead of splitting it with the states. In other words, the administration faces a stark choice when it comes to Medicaid: Either blow up the state budgets, or bust the federal tab."
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