Ohio’s Medicaid expansion remains controversial with some of Kasich’s fellow Republicans, and it is not certain whether the GOP-dominated state legislature will extend it beyond next year when Medicaid comes up for re-authorization in the next budget cycle for fiscal years 2016 and 2017.
“I can guarantee there will be a debate in the budget-making process next session” about Medicaid expansion, said Rep. Ron Amstutz, R-Wooster, who is chairman of the House Finance and Appropriations Committee. “How the cost projections are designed will be a major area of interest.”
Kasich remains a champion and it was his persistence that led to expanding eligibility to the program that provides health insurance to the poor.
The Ohio House last April passed the biennial budget for fiscal years 2014 and 2015 without Medicaid expansion as the governor had proposed, and the Senate passed the House version with no changes. The budget also included an amendment expressing clear opposition to expansion, which grants Medicaid benefits to most people earning up to 138 percent of the federal poverty level.
Stymied by the legislature, Kasich and Ohio Medicaid Director John McCarthy found a trap door. McCarthy last fall submitted a request to the state Controlling Board to accept $2.5 billion from the federal government to expand Medicaid — effectively bypassing the legislature.
It marked the largest dollar request ever heard by the Controlling Board, a seven-member bipartisan body that meets biweekly to approve spending proposals — many of them modest — by various state agencies.
But the approval that expanded Medicaid expires next June, bringing the issue back to the General Assembly, where there remains staunch opposition.
The state and federally subsidized health care program already accounts for about 30 percent of the state budget, and expansion is expected to increase Ohio’s annual Medicaid costs by nearly half a billion dollars by 2020.
The federal government has committed to covering the entire cost of Medicaid expansion through end of 2016. After that, the federal share will fall to 95 percent in 2017 and then to 90 percent by 2020.
Kasich has argued that Ohio will continue to receive billions of federal dollars that will more than offset any additional state costs, helping to create jobs, boost economic growth and lift some of the burden of health care costs from hundreds of thousands of Ohioans.
“As you know, Gov. Kasich worked tirelessly in the last budget to extend health care coverage to additional low-income residents to support Ohio’s jobs-friendly climate, protect businesses, help veterans and shore up the state’s mental health safety net,” said Jim Lynch, a spokesman for the administration. “Reforming Medicaid has been a key priority since day one.”
Although the plan is to run the reauthorization through the budget process, it’s possible the Controlling Board could act again if the legislature refuses to authorize the expansion a second time.
The Ohio Department of Medicaid still has a statement posted on its website that says the only action required to extend Medicaid coverage is Controlling Board approval.
Better health outcomes
Medicaid expansion is already giving more Ohioans greater access to care while reducing the uncompensated costs for providers and health systems.
Officials at Dayton-based Premier Health, the largest hospital network in the Miami Valley, said the cost of “unreimbursed” care provided to medically uninsured and under-insured patients has fallen by 8 percent on an annualized basis from 2013.
At the same time, the number of uninsured patients showing up for free treatment at Premier hospitals dropped by 38.5 percent. Premier officials attribute the drop to expanded Medicaid coverage that now accounts for about 23 percent of Premier revenues — up from 17.9 percent before Medicaid expansion.
Kettering Heath Network — Premier’s chief competitor — also has seen a sharp decline in the number of uninsured patients being treated at its hospitals and the cost of providing charity care, said Elizabeth Long, a Kettering spokeswoman.
“We are seeing the trend, but we have not quantified it yet,” Long said.
At Community Health Centers of Greater Dayton clinics — which include the Dr. Charles R Drew Health Center and East Dayton Health Center — uninsured care costs have also been cut dramatically, while the share of patients with Medicaid coverage has climbed from 49 percent to 60 percent since the expansion of Medicaid, said Executive Director Gregg Hopkins.
“Medicaid expansion has improved our cash flow, obviously, because now more patients have an ability to pay,” said Hopkins. “But the really good news is that now more people are getting care.”
Hospitals and clinics across the state have seen similar results, according to a new report from Policy Matters Ohio, a nonprofit, nonpartisan policy research institute.
At Cleveland’s MetroHealth System, which launched a pilot expansion of Medicaid in 2013, charity care costs were cut in half from $268 million in 2012 to $132 million last year, according to the report.
The cost savings contributed to upgraded credit ratings for the Cleveland system this year from Standard & Poor’s, Moody’s and Fitch, the report said.
Reauthorization not certain
Some of the opposition to Medicaid expansion seems to stem from the unpopularity of the law that made it possible.
For many Republicans, who almost universally oppose the Affordable Care Act, supporting Medicaid expansion is a tacit acknowledgement that Obamacare is here to stay.
Kasich had to backpeddle last week after he was quoted in an Associated Press article saying there would be no repeal of Obamacare. He later said he believes the Affordable Care Act could be repealed without impacting Medicaid expansion.
John Bowblis, an economics professor and health industry expert at Miami University, said taxpayers — along with the newly insured — would get hurt if the Ohio Medicaid expansion is not reauthorized.
“You’re talking about money coming from the federal government that Ohio citizens have sent to Washington, D.C., that they wouldn’t be getting back,” Bowblis said, referring to the federal tax dollars that support expanded Medicaid in Ohio. “If you cut that benefit, you’re basically wasting Ohio taxpayers’ money. From a political standpoint, that could definitely influence the legislature’s decision on continuing expansion.”
Bowblis argues that states like Ohio can choose to support Medicaid expansion, which may allow some Republican lawmakers — even those vehemently opposed to Obamacare — to justify supporting expanding eligibility.
“Obamacare gave states the choice of whether or not they wanted to expand their Medicaid programs,” he said. “But in the end, the expansion of Medicaid was a state choice. When it comes to things like the exchanges (Ohio’s health insurance marketplace) and the individual mandate (the law’s requirement that most people obtain health coverage or pay a tax penalty), the state didn’t have a choice. So the expansion of Medicaid can be framed as a federal mandate versus a states’ right issue. And Republicans tend to be more in favor of states’ rights.”
‘Some kind of path’
Amstutz said the overriding theme of the debate over expanding Medicaid may ultimately have less to do with states’ rights than the effectiveness of the program and its long-term sustainability.
“On one hand, we have a lot of folks that are not in a good situation and are struggling, and there needs to be some kind of path for them that helps them go forward,” Amstutz said. “On the other hand, we all sense that we have a health care system…that has really drawn down our gross domestic product and is really not sustainable on the path it’s on.
“Those are the kinds of conundrums and challenges that have to be confronted if we want to have a healthy path for folks to move up to better places in their lives.”
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