I never turn down a free meal. It’s there. It’s free. Why would you? Of course, it starts to show after a while. Those free meals can add extra pounds that extract their own price at some point down the road.
The Supreme Court has ruled on the Affordable Care Act, and governors around the country are cautiously weighing the costs of a free meal.
Medicaid is the government health insurance program designed for low-income families. The program is under the purview of individual states. Each state determines the qualifying criteria and administers the plan. As of 2010, Mississippi had 621,000 citizens in the program. That’s out of about three million people. Federal government subsidies cover 84.4 percent of the costs.
One main plank of the new law expands the Medicaid rolls to 133 percent of the poverty level. This measure, alone, will lead to a big decline in the number of uninsured people in the country. It will also lead to a big increase in Mississippi’s Medicaid roll. This is expected to grow by about 320,000 upon expansion. That means one in three Mississippians will be on Medicaid.
To entice states to comply, the federal government has agreed to pick up 100 percent of the tab for the gap between current costs and costs under expanded coverage. Voila! A free meal. So why are some governors threatening to turn down this free meal?
It seems they are worried about the burden of extra pounds to an already stretched budget. Federal money will cover all costs, but only for 2014 through 2019. In 2020, that support will decline, and each state will have to make up the difference. There is a penalty to any state who does not comply.
The Supreme Court ruled that states cannot be penalized for noncompliance. Some governors see this as a way to opt out of expansion. To me, this seems like a way to have your cake and eat it, too. Based on the ruling, it appears states can take the money now and thumb their noses at the federal government later. And the federal government would have no teeth to enforce such an action.
So, eat up! As my mama likes to say, “Don’t worry! I didn’t put any calories in that pie.”
Nancy Lottridge Anderson, Ph.D., CFA, is president of New Perspectives Inc. in Ridgeland — (601) 991-3158. She is also an assistant professor of finance at Mississippi College. Her e-mail address is email@example.com, and her website is www.newper.com.