Health Care Bill Would Strain States By Expanding Medicaid, Analysts Say

The health care bill that is on the verge of passage is striking fear into hearts of several states that they will be left on the hook for the cost of expanding Medicaid.

Half of the 32 million Americans who would gain coverage under President Obama's sweeping health care reform would be pushed into Medicaid, the federal insurance program for the poor and disabled that is barely able to serve the nearly 60 million people already using it.

Under the bill, Democrats require the federal government to pick up the entire cost of new Medicaid patients through 2016. But then the states start to pick up more and more, first by 5 percent, then it rises year-by-year to 10 percent.

But the states are having a hard time now and many say even a small share of insuring 16 million more Medicaid patients down the road will be tough.

"Every member of Congress will be hearing from their governor, from every political person in their state saying we don't have the money," said Jospeh Antos, a health care scholar with the American Enterprise Institute.

He added that Medicaid isn't the ideal way to expand coverage.

"The point is not for everyone to get insurance, but for everyone to get good health care and Medicaid already has a problem in that regard," said Antos.

He told Fox News that pushing 16 million more into that system will stress it to the breaking point. That's because Medicaid reimburses so far below private insurance -- even below Medicare -- that Medicaid patients have trouble even finding a doctor.

"You can wait a very, very long time," Antos said. "People talk about the problem with waiting lines, and rationing and so on. It's happening right now in the Medicaid program."

Rep. Dave Camp, R-Mich., called health care reform an "entitlement expansion."

"They spent $400 billion to put 15 million on Medicaid and we all know that Medicaid doesn't really deliver the goods," he said. "It's really a false promise."

Recent reports show doctors dropping patients because they were actually losing money on every visit. But the states are even more worried because they share the cost of Medicaid with the federal government.

"This is going to be a financial disaster for the states," said Rhode Island Gov. Donald Carcieri. "Every state right now is battling Medicaid costs. After education aid, Medicaid is the next largest cost for every state."

That is such a concern, it led to some of the biggest controversies of the entire reform effort. Sen. Ben Nelson, D-Neb., won what became known as the Cornhusker kickback in which the federal government was to pay Nebraska's share of Medicaid forever. That brought howls of protest from California's governor who said the mandate would cost his state billions of dollars.

"You've heard of the bridge to nowhere," Gov. Arnold Schwarzenegger said. "This is health care to nowhere."

Lawmakers say they're taking the Nebraska deal out of the bill but it is evidence of how concerned the states are about the costs Washington is imposing on them.

"It's a significant concern," said Utah Gov. Gary Herbert. "It's going to be an unfunded mandate that we have to absorb in the states. Medicaid has always been a challenge anyway. It's just going to be a bigger challenge as we go forward."