Moody’s: Budget Cuts Hurt State Finances More Than Health Care Reform

Several state governors say they’ll reject Obamacare’s Medicaid expansion because the program will be too expensive for the states, but federal budget cuts could do more harm to state finances than the Medicaid expansion included in the Affordable Care Act, according to Moody’s Investors Service. States’ credit ratings will likely not be affected by whether or not they opt into the Medicaid expansion, Moddy’s explained. But if Congress excludes the military from the planned “sequestration” spending cuts, that could lead to more cuts in other programs, like Medicaid, and put more pressure on states. “Rising healthcare costs and an aging population will continue to increase Medicaid’s costs and challenge states’ finances, regardless of how federal healthcare reform is ultimately implemented,” one Moody’s official said.