States look for revenue transfusions
Published 8:33 am Tuesday, October 19, 2010
Local and state governments across the country scrambled to adopt balanced budgets. Many of them could have even less money for next year’s spending plans. That’s not good news, and it’s made even worse with the prospect of having to pay a large part of the nationalized health care that is beginning to take effect.
Even as 20 states try to convince a federal court that the mandated federal health care program is unconstitutional, a recent poll shows that many people want Obamacare to do even more than the legislation mandates.
Of course, taxpayers will have to pay for the coverage, regardless of how far the benefits go. And despite their desire for more services, people generally don’t like tax increases, as those dealing with their government budgets have been reminded.
With this in mind, officials will have to deal with the fact that states will have to pay a fair part of Obamacare costs.
Even before those new charges kick in, some states already have had had to curtail health care services. With the projected revenue shortfalls for the next year (or more), how will states pay for their share of the millions of people expected to join the government health care rolls? It can only come from one place: taxpayers’ pockets.
The federal government allocated $5 billion to assist the states, but that amount will be spread out over four years, for all states. As many as 30 million people are predicted to be enrolled in the federal health plan, in addition to those who already receive Medicaid, Medicare and veterans’ health care.
That number might be even higher, given the obstacles the bill imposed on those who want to maintain private coverage.
In order to raise money for the government program, the bill imposes a higher premium tax on commercial insurance and adds new taxes on the development and sale of medical devices. The premium tax will have a direct effect on private insurance costs, while the tax on devices will have an indirect effect – patients could face higher costs that will pay for the charge on new devices, or find themselves dealing with insurers that will only cover the older, and presumably inferior old equipment.
Getting more people insured is a laudable goal. However, policies that increase costs serve to deter, not encourage, participation; that is why so many people are concerned that the law will drive more customers onto tax-supported programs rather than private insurance.
That’s not good if you are a taxpayer, as most people are. Worse, it’s still unclear what will happen to all those millions of people expecting complete health care services when the money runs out. The options mean higher taxes, or lower quality of service.
Or, as we have seen with so many other government programs, both.