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Obama folks cooked the books on Obamacare

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A big part of the false Obamacare promise to extend health insurance coverage to everyone was the expansion of Medicaid on the state level.

The fight surrounding Medicaid expansion in Arkansas was a brutal one that ultimately resulted in a compromise between Democrats and big government Republicans which expanded Medicaid by adding in a so-called “Private Option.”

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But the whole program still relied on federal funds, thus needing federal approval of it’s budget by the Department of Health and Human Services.

A report recently appearing in Forbes uncovered how the Obama administration’s HHS, along with “Private Option” supporters in Arkansas, “cooked the books” in order to get approval of the budget for Medicaid expansion.

An audit of Arkansas’ Medicaid expansion by the nonpartisan Government Accountability Office (GAO) revealed not only that program costs were much higher than original estimates, but that the Obama administration’s HHS violated its own budget neutrality rules in approving Arkansas’ request for Medicaid waivers.

The budget neutrality rules mean that states seeking waivers must demonstrate that they will not spend any more federal dollars under the waiver than they would have without the waiver. But HHS ignored this rule and “cut corners” to approve the planned expansion.

The GAO discovered that the federally approved spending limit was based completely on hypothetical costs, which assumed that Medicaid reimbursements to doctors would be 67% higher than they previously were.

Obamacare’s own actuaries “questioned the reasonableness” of these numbers, but HHS officials approved the plan anyway, not bothering to verify the proposed numbers or request any additional information.

As a result, the Medicaid expansion budget was inflated by nearly $800 million.

But the truth is, Arkansas was actually planning to cut Medicaid reimbursement rates before the Obamacare expansion, and the federal approval of the expansion plan is based entirely upon made up numbers with no basis in reality.

The supporters of Obamacare expansion used creative and misleading numbers to convince Republicans in the state to agree to the plan and essentially asked everyone to “just trust us” when it came to the estimated budget costs.

To make the whole mess even more convoluted, on top of using inflated estimates some 67% higher than actual estimated costs, the actual realized costs are running even higher than the inflated estimates, putting the program costs some $20-30 million over the original hypothetical estimates, which were already exceptionally high.

In real numbers this means a Medicaid expansion that was originally slated to cost $325 per person, is actually costing about $495 per person.

This mess has led to the resignation of the state’s Medicaid Director, the defeat of one of the program’s biggest supporters in the primary election, as well as bitter back and forth fighting among critics and supporters in the legislature and local media.

The main question in all of this is, if the Obama administration’s HHS would break their own budget rules in order to approve Medicaid expansion in one state, what other rules will they break, or have they already broken, to further the goals of their failed healthcare reform law?

The entire Medicaid “Private Option” expansion plan in Arkansas needs to be redone using real estimates based on proven numbers or scrapped entirely. Furthermore, the people ultimately responsible for creating and approving the shoddy budgeting need to lose their jobs, both in Arkansas and at HHS.

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