Aug 27 2010
State Governments Will Spend Billions of Dollars to Comply with New Law
Consultants recently made news when they warned politicians who supported the health overhaul to stop touting the $114 billion on-budget estimated deficit reduction that Congressional Budget Office (CBO) estimated for the new health overhaul.
Americans increasingly understand the new law will add to the deficit and increases costs. Taxpayers and state governments will bear the brunt of costs for the massive Medicaid expansion. In fact, several states have estimated the extra costs their states will be faced to absorb as a result of the “affordable” new law.
• North Dakota estimated additional costs of $1.1 billion.
• Here’s Texas’ estimated additional costs of $27 billion (page 16).
• Indiana estimated additional costs of $3.6 billion.
• Virginia estimated additional costs of $1.5 billion.
• Louisiana estimated additional costs of $7.1 billion.
• Nebraska estimated additional costs of $766 million.
• Oklahoma estimated additional costs of $441 million.
Assuming these estimates are accurate, if state costs were extrapolated based on their a percentage of the total U.S. population, then the following would be true. If every state were proportionally hit with costs (as a percent of US population) the same as Texas, the additional total costs to all states would be more than $325 billion. If every state were to proportionally hit with costs (as a percent of US population) the same as Indiana, the additional total costs to all states would be more than $180 billion.
Even though these estimates are crude, if they are even roughly accurate, taxpayers and state governments will be paying a lot more than the projected $114 billion deficit “savings” the CBO estimated for the new law.
These costs were not reflected in CBO’s score for the new law, but they are real costs that must be borne by taxpayers and state governments.