March 2, 2011 6:50AM

Congressional Republicans May Be Understating the Cost of ObamaCare

Yesterday, the Senate Finance and House Energy & Commerce committees released a joint report on the costs that ObamaCare’s Medicaid mandate will impose on states. That report, which is based on other reports, likely understates the cost of that unfunded mandate.

In a new Cato Working Paper, “Estimating ObamaCare’s Effect on State Medicaid Expenditure Growth,” senior fellow Jagadeesh Gokhale constructed cost projections for the five largest states — California, Florida, Illinois, New York, and Texas — which account for 40 percent of the nation’s population. Gokhale carefully decomposed and organized micro‐​data and state‐​specific administrative data on Medicaid eligibility, enrollments, benefit recipiency, and average benefits per recipient. Gokhale found much larger cost burdens than the committees’ projections. 

For example, Gokhale projects that ObamaCare will force Florida to spend an additional $20.4 billion between 2014 and 2023. That is almost double the committees’ estimate of an additional $12.9 billion in spending by Florida between 2013 to 2023.