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Passing Proposition 2 won’t return Idaho’s money to Idaho

Passing Proposition 2 won’t return Idaho’s money to Idaho

Wayne Hoffman
October 5, 2018
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October 5, 2018

In the newly released state voter guide and in TV ads, Medicaid expansion proponents claim that Proposition 2 will bring Idaho taxpayer money back to Idaho.

Wrong. Under Obamacare, that is not even close to how Medicaid or its expansion works.   

Idahoans for Healthcare wrote, “Idahoans send hundreds of millions of dollars in federal taxes to Washington, D.C., but, instead of coming back here, our taxes are redistributed to the 33 other states that have expanded Medicaid.” A similar false claim is made in the TV ad.

It is true that the state sends hundreds of millions of dollars to the federal government. But states that have expanded Medicaid don’t get more money because Idaho and 17 other states declined to do so. Nor do states get less money if other states expand Obamacare.

Three years ago, the Congressional Research Service was asked this very question: “If a state chooses not to expand Medicaid to childless adults as specified under the Affordable Care Act/’Obamacare,’ are the federal funds that would have otherwise been spent on that state’s Medicaid expansion funds somehow being sent to other states?”

CRS answered, “If a state doesn’t implement the ACA Medicaid expansion, the federal funds that would have been used for that state’s expansion are not being sent to another state. There is not a set amount of federal funding for Medicaid. Each state gets the federal funding necessary for their Medicaid program."

The CRS memo continued, “If a state has implemented the ACA Medicaid expansion, then the states receive federal Medicaid funding for their approved expenditures under the ACA Medicaid expansion. If a state hasn’t implemented the ACA Medicaid expansion, the state would not receive any federal Medicaid funding for the expansion. However, this doesn’t mean any additional federal Medicaid funding would be allocated to states that have implemented the expansion.”

Idahoans for Healthcare is correct that the state of Idaho would receive more federal money if Medicaid is expanded. But that money won’t be pried out of the state treasuries of Medicaid expansion states like California, Oregon, and Washington. Rather, the money will have to be printed and added to the national debt; there is no money sitting in a federal treasury account waiting to be earmarked for Idaho. The money doesn’t exist.

Furthermore, the pro-expansion group may as well argue that too few people are supported by any number of government programs, that we’re better off drawing as much money from Washington, D.C. as we can by enrolling as many people as possible into as many programs as possible.

We all pay federal taxes. Why not sign up all 1.7 million Idahoans for food stamps, housing assistance, government healthcare, and an Obama phone? Because that would help bankrupt the country. Because it goes against everything we Idahoans believe in. Because the nation is drowning in debt and future generations of Americans would be stuck with the bill.

The supporters of Medicaid expansion can make a lot of claims about why they believe Obamacare’s Medicaid expansion is the right policy for the state. But the repatriation of Idaho tax money from other states isn’t one of them. In fact, it is an outright lie.

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