Medicaid plan a budget time bomb
Overloading the state's credit card is what got Illinois in such deep financial trouble.
If anyone wonders why Illinois is in such a sad state financially, the answer is relatively simple — our elected officials have repeatedly chosen to spend money they didn't have.
It's happened over and over again, the best example being repeated decisions to redirect money that should have gone to public pension systems into a variety of social welfare programs. Now the state faces pension underfunding of roughly $97 billion, and there is not enough money to fund a host of core state functions.
Another egregious example is the state's decision not to pay its bills in a timely manner, leaving thousands of individuals and businesses to wait for many months before being paid for services rendered.
They say that doing the same thing over and over again and expecting a different result is one definition of insanity. Well, here we go again.
Gov. Pat Quinn this week signed legislation that is expected to add 513,000 people to the state's Medicaid rolls. If and when that number is reached, one in four Illinois residents will be a Medicaid recipient.
How will the state pay for this dramatic expansion? As part of Obamacare, the federal government has pledged to pay 100 percent of the costs of 342,000 new Medicaid recipients from 2014 to 2016 and 90 percent of the costs for that same group through 2020. After that, Illinois taxpayers may well be on the hook for a bigger share of what will be a multibillion-dollar bill.
As for the remaining 171,000 new recipients, the state will bear a bigger share of the burden, a sum estimated to be in excess of $2 billion through 2020.
Even if Illinois' finances were strong, taking on this kind of open-ended burden would be a roll of the dice. Given our effective state of bankruptcy, the Medicaid expansion represents another unfathomable decision to indefinitely extend Illinois' financial woes.
Those who are happy with the status quo should be delighted that our elected officials have decided to continue to live on the financial edge. Those who wonder what our elected officials are thinking have another reason to wonder.