Obamacare’s Siren Call to Expand MaineCare Must be Rejected

At first glance, expanding MaineCare (Maine’s Medicaid program) under the provisions provided by Obamacare looks like “free money” since Uncle Sam will pick up the entire tab for the first 3 years. Who doesn’t like “free money?”

Of course, nothing is free. The reality is that there are significant costs to Maine’s economy that will be incurred if we listen to Obamacare’s siren call. In this blog post I will look at the most obvious cost–the unsustainability of MaineCare.

A few months ago, The Maine Heritage Policy Center released a study titled “Fix the System” (pdf) which detailed how large Maine’s welfare system had become (TANF, Food Stamps, and MaineCare). The study projected that by as early as 2016 there would be more people on welfare (480,347) than those who work a private sector job (473,183).

Much of the expansion in welfare rolls is due to MaineCare as former State Treasurer Bruce Poliquin recently pointed out–enrollment in MaineCare has increased by 69 percent since 2002.

The Obamacare induced expansion of MaineCare would greatly accelerate that day of reckoning. According to a study by the Kaiser Commission on Medicaid and the Uninsured (pdf), the expansion of Mainecare would add another 55,000 people onto Maine’s welfare rolls. As projected in the chart below, MaineCare’s expansion would–for the first time in history–push welfare rolls on par with the number of people with a private sector job.

This growth in welfare rolls is simply unsustainable in Maine and the rest of the country. Uncle Sam is already facing an entitlement crisis and luring states with “free money” to add to that burden is irresponsible.

Note: To minimize the need for projections, the chart assumes that the MaineCare expansion would occur in 2013. Under Obamacare, funding for Medicaid expansion would begin in 2014.
Chart Showig Mainers on Welfare versus Private Sector Employment