One Program Expansion Deserves Another

Posted by John LaPlante in Medicaid, Vermont on Nov 24th, 2009 | no responses

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Both the House and Senate bills put more people on Medicaid, and (at least for a while) have the federal government underwrite most of the costs incurred by that move.

The states that would add more people are concerned that they’ll be left holding the bag, eventually, for higher costs. But other states, such as Minnesota and Vermont, expanded their Medicaid rolls a long time ago, so they’re not happy about underwriting Medicaid expansion elsewhere. There will be new money flowing off the federal printing press, and they’re not going to get any of it.

One health policy official in Vermont, for example, said “All the federal money for this Medicaid expansion, the majority would be going to states that have not taken the steps that Vermont has (taken).”

It’s a great example of how government programs have a self-perpetuating logic. I sympathize with officials and taxpayers in Vermont, who, having already expanded their own obligations with minimal help from elsewhere, are now faced with underwriting more spending elsewhere.

The easiest political way to address the objection may be to throw more federal money at Vermont, which it can then use to expand Medicaid well into the middle class.

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