Will states drop Medicaid if they are forced to spend more?

As regular readers know I am a big fan of the idea of unintended consequences because I believe politicians are incapable of thinking beyond the moment. 

One aspect of health care reform is an expansion of Medicaid which is largely run by the states.  While there is some additional federal money going toward this expansion it is not sufficient to cover all the added cost and hence, cash strapped states are being saddled with more costs.  Hopefully, this new bill will not be paid by cutting school funding or other essential services but who knows.

A report on the I Love Benefits Blog speculates that some states may merely drop Medicaid and push people into more generous federally subsidized benefits created via health care reform.

Now that would truly be an unintended consequence.

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