Virtually everyone who understands federal government financing in this country believes we need entitlement reform. The existing programs either need benefit reductions, or the government needs more tax revenue to pay for benefits, or the programs need some combination of these two things.
Medicaid is a pure entitlement. Medicare and Social Security, although partially funded through individual payroll taxes, have become dependant on the general fund to pay for enrollee benefits. These three existing entitlements are growing so rapidly that bankruptcy, or at least a Greek-like debt crisis, are in the not-too-distant future.
The Affordable Care Act (ACA), or Obamacare, was signed into law almost four years ago. Although it has been called many things, good and bad, it has never been labeled an entitlement. Yet, this is exactly what it is.
A small percent of the cost of Obamacare goes to administrative overhead. The vast majority of the cost (at least 90 percent of the $1.76 trillion according to the nonpartisan Congressional Budget Office) will go to two programs. If adults, 18 and over, earn less than 138 percent of the federal poverty level (FPL), they qualify for Medicaid. If people earn between 138 and 400 percent of the FPL, they can receive government subsidies to purchase health insurance in the state/federal exchanges.
In other words, Obamacare is a massive new entitlement that rolls out in 2014, just as the country is already faced with reforming existing entitlements that threaten to bankrupt the United States.
Everyone agrees our health care system needs to be reformed. But placing millions of Americans into a new entitlement will be a huge drag on the economy and will push the country closer to austerity.