Federal promises seldom turn out to be trustworthy
One of the big concerns about expanding the Medicaid program in states is whether the federal government will keep its pledge to cover most of the cost.
One requirement of the new national health care law is that states expand Medicaid, though the Supreme Court has ruled states cannot be penalized for refusing to do so. Medicaid is a joint state-federal program, but the health care law calls for Washington to cover most of the cost of expansion – at first.
In the long term, states should have no confidence the federal government will keep its promises on Medicaid funding. The history of such programs is that expensive promises are made in Washington then, after a few years, broken.
Consider programs such as the old Revenue Sharing project, under which local and state governments received federal funding. Eventually, after many localities built Revenue Sharing into their budgets, the program was ended.
Or think about Community Development Block Grants, similar in many ways to Revenue Sharing. CDBG funding is being cut back too.
Then there’s special education funding, always a sore spot for schools, which do not receive what they should from Washington.
The record of federal promises to help local and state governments financially is one of getting recipients hooked, in a way, on expenditures funded by such aid – then cutting or ending it. Minnesota and Iowa should remember this as they go forward with implementing the provisions of Obamacare.