The idea of states dropping out of Medicaid is now being discussed in polite society. A few believe, mistakenly, that entirely state-run and -financed programs can save money in this area and still provide adequate access to care. Others are motivated by the impulse to play politics with health care and bog down President Barack Obama’s agenda.
The real reason for these conversations, though, has little to do with political gamesmanship and everything to do with stark reality: state lawmakers from both parties are staring into the abyss of massive state budget deficits. California will have to fill a hole of as much as $28 billion over the next 18 months, roughly equal to the entire amount of money the state spends on health care and higher education combined. Continue reading