Hidden Costs of Obamacare Exposed

While much has been written about the cost of the exchange and the Medicaid expansion, a mountain of hidden mandates could cost Pennsylvania taxpayers hundreds of millions of dollars over the next few years, according to Pa. Department of Public Welfare Secretary Gary Alexander.

During his recent testimony before the U.S. House Energy and Commerce Committee Alexander stated:

The terms of the law are inflexible and heavy handed, with the federal government dictating to the states how things ought to be. Instead of trusting the states. . . [the ACA] further removes decisions from the people by centralizing rulemaking by federal bureaucrats. If the federal government wants to set all of the rules and parameters, then why involve the states at all?

The total cost of these mandates is still largely unknown, but DPW was able to calculate the sum of the largest items, totaling $134 million for fiscal year FY 2013-14 and nearly doubling to $267 million for FY 2014-15.

The new mandates force the state to build a new IT system to track income, use a federally-selected coding system, require the state to compare its data with IRS data that the IRS won’t share, and prevent the state from “going green” by implementing a paperless application process. The law also prohibits asset limit tests for Medicaid recipients. This could allow lottery winners or retired billionaires to collect Medicaid benefits, just as we saw with recent cases of lottery winners on food stamps.

Moreover, the ACA increases opportunities for fraud and abuse, by switching to annual Medicaid eligibility reviews and allowing hospitals – who can profit off the program – to approve people on the spot with states verifying eligibility later. The GAO identified nearly $22 billion in bad Medicaid payments last year, even before these changes went into effect.

Instead of partnering with the states to improve care and hold down costs, the ACA amounts to a set of dictates that will harm, rather than help, individuals and families.