ObamaCare Proceeds Apace in Maryland

Marc Kilmer Mar 28, 2013

Other states are doing all they can to block implementation of the Affordable Care Act (aka, “ObamaCare”), but Maryland is continuing its strong embrace of this controversial law. While these states are concerned about the long-term cost to taxpayers of implementing this bill, Maryland legislators don’t seem concerned at all. Their blasé attitude towards the hidden dangers of ObamaCare will come back to haunt Marylanders.

The general argument for implementing ObamaCare is that it will provide the state with a bunch of free federal money to expand Medicaid and give a bunch of people affordable insurance. That’s not quite the case. In fact, this “free” federal money doesn’t last forever, and the insurance requirements on small businesses can lead to hefty fines for the owners of these companies.

Many state legislators around the country are looking for ways to help their constituents avoid the significant downside of this legislation. With most federal statutes, state legislators have little say over implementation. Not with ObamaCare, however.  The way legislators can avoid the negative outcomes from ObamaCare is explained by the Cato Institute’s Michael Cannon:

 The Patient Protection and Affordable Care Act (PPACA) itself empowers states to block the employer mandate, to exempt many of their low- and middle-income taxpayers from the individual mandate, and to reduce federal deficit spending, simply by not establishing a health insurance "exchange."…

Collectively, states can shield all employers and at least 12 million taxpayers from the law's new taxes, and still reduce federal deficits by $1.7 trillion, simply by refusing to establish Exchanges or expand Medicaid.

Maryland won’t be participating in this rearguard action against ObamaCare, however. The House of Delegates just passed a bill to further implement the federal law. Part of the legislation involves finding a dedicated funding source for the health insurance exchange, a marketplace designed to help lower the cost of health insurance. The funding source for the bill? A tax on health insurance policies. So the state is taxing health insurance (thus raising the cost of it) in order to fund a government program that’s supposed to lower the cost of health insurance. Does that make sense to you?

Another part of the bill would expand eligibility in the state’s Medicaid program. Expanded Medicaid eligibility means that more people will qualify for the program year after year, and the state will have to accept them regardless of cost. This type of automatic, unpredictable expense is a large part of the reason the state budget had problems during the past recession. Expanding a program that’s already causing budget stress makes no sense.

Yes, in the short-term the federal government will pay the cost of those newly-eligible for Medicaid. This full federal funding is only temporary. When it ends, Maryland taxpayers will be paying more because of the decisions made by legislators this year. All expanding Medicaid does is make the structural deficit even worse.

While the governor and legislators claim that they the budget they are working on is responsible, it still relies heavily on borrowing to pay for current (and past) operating expenses. The General Assembly is considering a gas tax because politicians claim there isn’t enough money to pay for necessary transportation projects. And yet these same legislators pass a bill to spend even more money on implementing ObamaCare? I guess it makes sense to those in Annapolis, but it sure mystifies me.