The National Governors Association released a report yesterday predicting that rising health care costs (driven in large part by Medicaid) may bring budget shortfalls for states. Anyone who remembers the recession earlier this decade knows that this is not an unexpected situation. And yet, many states are  expanding Medicaid or their children's health insurance programs. You would think that with an uncertain economic future state policymakers would not be rushing to expand programs that have proven in the past to consume an ever-increasing share of state revenue.

I'll make a prediction here: if we go into a recession most states will face budget deficits and Medicaid will grow for most states by at least 10% annually. States will make minor adjustments to Medicaid eligibility but will focus most of their energy on a federal bail-out, claiming that they had no way of knowing that Medicaid would increase as much as it did. And they will likely get more federal money because Congress routinely abdicates its fiscal responsibility when faced with Governors asking for money.