This is the Cato Daily Podcast for Friday, July 8th, 2011. I'm Caleb Brown. The Affordable Care Act, known as Obamacare

depends on the expansion of Medicaid.

But Medicaid is one of the key drivers of federal spending growth and deficits.

Jagadish Goklay Senior Fellow of the Cato Institute comments on recession, Medicaid, and Obamacare.

Medicaid is health insurance coverage offered by the states to their low-income populations.

The program is operated by the states, but is paid for by both the states and the federal government.

The federal government participating on average about,

or contributing on average about 56 cents

on every dollar of Medicaid spending.

During the recession, the federal government expanded its financial participation

in supporting the states because of anticipated increases in

enrollment and requirements for state spending on Medicaid. But that is

about to expire beginning this July.

But in the meanwhile, enrollments and coverage for Medicaid has

is high and has remained high because the recovery has been slow.

And so low-income folks who... remained hard because the recovery has been slow.

And so low-income folks who need health services and health coverage are still being

supported on Medicaid, which means with the withdrawal of federal funding,

the states will have to bear a larger share of their Medicaid spending.

And so state budgets are under considerable pressure.

Historically, Medicaid spending has been growing quite rapidly in the states,

primarily because of the federal financial participation of states. Whenever there's a tight budget

...