Bluegrass Beacon: Obamacare comes to Kentucky: When federal money runs out, what then?

By JIM WATERS
Bluegrass Institute for Public Policy Solutions

Friday, April 5, 2013 – There’s not much protection – and even less affordability – for Kentuckians in President Obama’s misnamed Patient Protection and Affordable Care Act, otherwise known as “Obamacare.”

Temporarily, Kentucky may be able to afford it – only because the federal government is waving dollars in front of cash-hungry politicians. But in the long run, Obamacare will cause healthcare premiums to rise by between 65 percent and 106 percent, according to a recent congressional report.

Where is the protection and affordability in that?

While the U.S. Supreme Court last summer ruled that the federal government cannot force individual states to abide by the law’s key state-based provisions – government-run health exchanges and expanding Medicaid coverage – some governors, including Kentucky Gov. Steve Beshear, seem eager to make their constituencies attached to the 20,000-page government health-care teat known as Obamacare as soon and as firmly as possible.

Even governors who oppose the policy on constitutional grounds (this does not describe Beshear) are surrendering as the federal government waves tens of millions of dollars in front of their broke, debt-ridden states.

All Washington had to do was dangle $183 million in front of Gov. Beshear and he crumbled, quickly issuing an executive order to establish a state-run health exchange that will force young and healthy Kentuckians to essentially subsidize everyone else in the system.

This will increase the dependency upon government among the thousands of Kentuckians and millions of Americans forced to participate in the plan, while insurers who only want to remain in business will be forced to provide certain government-mandated services and be greatly limited on how much they can charge for less-than-healthy individuals who require more care.

That means that young healthy Kentuckians and business owners – the very people Beshear and his fellow politicos in Frankfort say we need more of in Kentucky – will end up paying the freight.

An obvious question for the governor: how will such a policy encourage true growth and economic development in our state? Beyond that, there’s another important question: How can Kentucky afford Obamacare’s big-government state mandates after Obamacare money is gone?

No worries, says the governor. Taxes from insurance companies and rearranging tobacco settlement dollars will foot the bill.

Really?

And considering that businesses are forced to pass on increased costs to their customers, who will pay those taxes? It will be those very taxpayers already will squeezed by this disastrous government policy through higher premiums, fewer choices and diminished quality of service.

But what happens as tobacco’s economic productivity decreases in our state? And how is tobacco revenue a reliable revenue stream to pay Kentuckians’ future health care bills?

While we’re asking yet-unanswered questions about Obamacare – especially as it relates to the policy’s impact on states – how can Kentucky afford to add more than 300,000 individuals to its Medicaid rolls next year?

A recent Heritage Foundation study shows that such an expansion would cost Kentucky at least $846 million during the next decade.

The carrot dangling in front of Beshear ought not to fool inquiring Kentucky minds. Though the feds promise to pay for the radical expansion of Medicaid for the next three years, a substantial portion of the bill will have to be picked up by Kentucky taxpayers beginning in 2017.

The governor has yet to sign the Medicaid expansion deal. He should delay – at least until he can explain how the commonwealth will fund such a huge increase in the future for an already bloated program.

Federal dollars are being used to seduce states to join the big-government health care chorus. But when the fed money starts to dwindle – which it will for Kentucky’s Medicaid program in just three short years – what is Beshear’s plan?

When the money runs out but the spending addiction remains: What then?

Jim Waters is president of the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at jwaters@freedomkentucky.com. Read previously published columns at www.freedomkentucky.org/bluegrassbeacon.

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