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Medicaid expansion hits snag with health care ruling

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    Former CBO director Douglas Holtz-Eakin weighs in

  • Duration 3:55
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One wild card in all of this is the part of the health care law that the Supreme Court did not uphold today.

It involves a huge Medicaid expansion in all fifty states.

To achieve that the feds threatened to withhold existing Medicaid the stuff that they've already been giving the states to fund -- Medical care -- poor people.

If any state did not participate in the new expanded Medicaid program.

But the court ruled that those states cannot be penalized that way for opting out of Obama care of this piece of it.

And that is a victory for the 26 states that sued the government over the health care law.

This piece of it again Medicaid piece it could however lead to a whole new set of issues namely cool now is gonna pay for -- very -- To get the health care that congress put in place for that you.

-- federal taxpayers hope.

Joining me now the former director of the Congressional Budget Office that was Holtz -- -- was president now the American action forum.

And he and his group filed a brief a friend of the court brief on this Medicaid issue.

Dug in terms we can understand what High Court do today.

But the High Court said was you cannot as you mentioned take away -- State's existing funding for Medicaid.

If they choose not to expand it as the Affordable Care Act warn them so.

And in dollar terms then a governor can say well -- no thanks I'm not gonna do this Medicaid expansion.

And and those people will not go on my books.

Even more striking.

Those very same individuals will be eligible for federal subsidies in the so called insurance exchanges.

And so governors have a very clear incentive to say no thanks to the expansion.

Send those people off the exchanges to get insurance at the federal government's expense that's -- -- be really expensive.

So so this you were out -- there -- -- We visited this lots X two main groups of people -- very -- and they're gonna get them on average through expanded Medicaid.

-- the middle class and they -- get their coverage through these state insurance exchanges.

That the federal taxpayers are helping pay for correct.

Absolutely -- -- -- now now you're with dry the coverage potentially.

On the Medicaid front you've got people who have not a lot of money who may have to go over here on to the state exchanges.

And is the funding for that taken care of in this law.

In the Lott says whoever shows up gets the subs in -- matter what so of the person at risk here is the American taxpayer that's clear.

And -- important things is.

They chose to put about half of the insurance expansion of the Medicaid because it's cheaper so we're going to see is a much more expensive bill.

And the second thing that's come to light a Megan is that in 2014.

Governors have the option to roll back their Medicaid coverage to the -- bare minimum.

And so there will be even more people eligible for these insurance subsidies than we thought that the potential cost of this is in the hundreds of billions of dollars.

Dee -- is do you are you saying that that today's ruling by the Supreme Court has added hundreds of billions of dollars to the price tag of obamacare.

Yes they there's no question it's more expensive and it's going to be much mark -- But but it is up to the states now whether they want to participate in the program are not the High Court didn't say you can't they said it's now up to you.

Do the feds make it very attractive for the states to participate in this.

And won't at least that the democratic run states do -- so I mean how many states -- we really talking about that are gonna opt out of this Medicaid expansion.

What we don't know for sure but the -- certainly favors opting out if if you stay in.

You -- responsible for 10% of the cost of the expansion.

If you don't.

You're responsible for no cost and those that it is -- state -- -- insured.

They get covered with a better insurance package so if you care about immaturity -- -- your federal that your state budget.

The real senate has just push this cost off the tax parents and now.

I gotta go I need a very quick answer Nancy Pelosi says she's not concerned about that part of the ruling at all should -- be yes.

That's short -- -- thank you sir.

Thank you.

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