 Let's spend two minutes talking about a major new development. It turns out a large part of the Affordable Care Act is costing a lot more than expected. How much? About $26 billion in 2015 alone. Here's why policymakers and you should be paying attention. The main way the Affordable Care Act increased health insurance coverage is through the expansion of Medicaid, the joint federal state healthcare program for lower income people. But a new government report shows the Medicaid expansion cost nearly 50% more per enrollee than what was projected just one year ago. The growing cost of the Medicaid expansion is a major problem for both the Affordable Care Act and policymakers. In 2014, the Congressional Budget Office estimated that the Medicaid expansion would cost $42 billion in 2015. The actual cost was $68 billion. Although some of this increase was due to higher than expected enrollment, about $19 billion was from underestimating how much states would spend on each enrollee. Why was the government so far off? They didn't correctly consider the incentives involved. Washington is currently reimbursing states for 100% of the cost of Medicaid expansion enrollees. Before, it was 57%. Now states are paying much higher rates to insurers for Medicaid than they were before. Why? Think about it this way. It's Saturday night. It's been a long week. You're out to dinner. You're homing in on the selection when the waiter stops by to tell you that someone else in the restaurant offered to pick up your check. Dinner is free. You look back at the menu. Does your order change? Does the filet mignon look more enticing? This is what's happening with Medicaid expansion. The federal government is picking up the entire tap so it shouldn't be surprising that states are spending more. Meanwhile, hospitals and insurers in the state are no doubt happy to accept the higher payments. To learn more about this problem and ways Congress can fix it, visit Mercatus.org.