On August 31, 2023, Paul Winfree’s work titled “The Contribution of Federal Health Programs to U.S. Fiscal Challenges and the Need for Reform.” was referenced in The Wall Street Journal article “Fitch Downgrade Could Mean Medicaid Cuts.”
From the article:
The Paragon Health Institute estimates the federal government’s borrowing capacity will bottom out in the next 30 to 50 years, with Medicare, Medicaid and ObamaCare subsidies acting as major drivers of debt. That means significant structural reforms are needed—including a reduction in federal healthcare baseline spending of at least 7.5%—to provide the federal government with the flexibility to manage financial risks and economic downturns. Instead of Medicare or Social Security, Congress will likely cut funding for state budgets, including Medicaid, which made up approximately 27% of state budgets in 2022.
Before the pandemic, Medicaid expansion’s effect on state budgets was much larger than anticipated. Data from the Kansas Policy Institute and the Foundation for Government Accountability demonstrate that Medicaid-expansion states signed up more than twice as many able-bodied adults as predicted. Per person costs exceeded estimates by more than $3,000 a year, leading to cost overruns topping $66 billion.
In New York, which has higher per capita Medicaid spending than any state, Medicaid costs have driven widening budget deficits. States could soon seek economically damaging tax hikes or draconian budget cuts to fill budget gaps that the federal government no longer covers.
