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July 7 2017

Why on earth would Ohio continue to grow Medicaid?

by Hadley Heath

The Ohio state legislature is trying to do something responsible: freeze the expansion of Medicaid in the Buckeye state. But Gov. John Kasich, otherwise a nice guy I’m sure, has vetoed the freeze, which was included in a state budget that also placed restrictions on the state’s executive branch to make Medicaid policy changes.
 
It’s the sad truth, but Medicaid enrollees have become pawns in the national debate over health policy. Most of ObamaCare’s effect on health insurance coverage in the United States has been to increase Medicaid rolls. Net private health insurance coverage only increased by about 2.3 million people (because while some millions have enrolled in the ObamaCare exchanges, millions of others lost plans they had and liked).
 
Therefore, when national policy wonks and politicians talk about potential coverage losses due to the repeal of ObamaCare, most of what they are talking about is related to Medicaid. But even “coverage loss” isn’t quite the right term… Just as a “budget cut” in Washington really means a reduced rate of growth in spending, so a Medicaid “coverage loss” really means that repealing ObamaCare would slow the rate at which new enrollees are signing up for the government program for the poor. As the CBO report said:
Medicaid enrollment would be lower throughout the coming decade, culminating in 14 million fewer Medicaid enrollees by 2026, a reduction of about 17 percent relative to the number under current law (see Figure 3). Some of that decline would be among people who are currently eligible for Medicaid benefits, and some would be among people who CBO projects would, under current law, become eligible in the future as additional states adopted the ACA’s option to expand eligibility.
Emphasis mine.
 
Now to Ohio, which has been a very important state in the national debate. Ohio has a Republican governor, Kasich, who has been supportive of Medicaid expansion. According to Jason Hart, writing for National Review, the state has seen Medicaid rolls explode from 2.2 million to 3 million due to the expansion.
 
What’s too often not discussed is the effect of Medicaid’s expansion on truly vulnerable populations: the disabled, low-income pregnant women and elderly. These groups were typically eligible for Medicaid (in all 50 states) before expansion, and the federal government shared costs with states. Uncle Sam matches each dollar states spend on these enrollees at a rate of $1 to $3 depending on the state.
 
Enter Medicaid expansion, where Uncle Sam will now pay about $9 for each dollar states spend on expansion enrollees, who are more likely to be able-bodied childless adults. Yes, ObamaCare basically encourages states to crowd out the truly vulnerable people in society in order to enroll millions of new people, who conveniently have become a talking point for the left in the debate over ObamaCare.
 
Why on earth would Ohio – or any other state – continue to enroll people now? The best course of action would be to focus on making private insurance plans more affordable, so that people with modest incomes can afford to buy them on their own. Not only would this protect Ohio’s taxpayers from the unknown future expense of their share of the program’s cost, but it would also result in more Ohioans getting better access to care. The truly needy remaining in Medicaid wouldn’t be crowded out, and other low-income Ohioans would have access to more doctors and care
 
If Ohio wants to pursue a compassionate and commonsense policy, it should freeze the Medicaid expansion and focus on free-market reforms. But if scoring political points is the main goal, by all means, keep the veto. 
Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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