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June 28th, 2013 By German Lopez | News | Posted In: News, Health care, Budget

State Budget Rejects Medicaid Expansion

But Medicaid funding increased by $1 billion

medicaid

Despite strong backing from Republican Gov. John Kasich, the Medicaid expansion didn’t make it into the final version of the two-year state budget passed by the Republican-controlled General Assembly on Thursday.

Col Owens, co-convener of the Southwest Ohio Medicaid Expansion Coalition, calls the expansion’s failure a disappointment, but he says he remains optimistic the expansion will be taken up in future legislation.

Under the Affordable Care Act (“Obamacare”), the federal government is asking states to expand their Medicaid programs to 138 percent of the federal poverty level, or an annual income of $32,499 for a family of four.

States are given a powerful financial incentive for doing so: For the first three years, the expansion is entirely paid for by the federal government. Afterward, the federal commitment is dropped to 90 percent, where it will indefinitely remain.

The federal government on average pays about 57 percent of Medicaid costs, while states pay for the rest. So the 90-percent match for the expansion is a uniquely lucrative deal.

But Republican legislators say they’re skeptical the federal government can afford such a large commitment to Medicaid, often calling the size of the expansion unprecedented.

Owens claims there is a precedent for the Medicaid expansion: Medicaid. He says the federal government has historically upheld its commitment to Medicaid, which insures 2.2 million Ohioans. There’s no sign that will stop any time soon, according to Owens.

To support his claim, Owens cites scoring from the Congressional Budget Office (CBO), a nonpartisan organization that scores federal policy proposals to gauge their fiscal and economic impact.

In July 2012, the CBO found repealing Obamacare, which includes the Medicaid expansion, would actually increase the federal deficit by $109 billion over 10 years, which means the health reform law is an overall fiscal gain for the federal government.

At the same time, analysts have found the Medicaid expansion would be fiscally beneficial for Ohio. Earlier this year, the Health Policy Institute of Ohio released an analysis that found the Medicaid expansion would insure nearly half a million Ohioans and save the state about $1.8 billion in the next decade.

Instead of being concerned about fiscal problems, Owens concludes opponents of the Medicaid expansion simply dislike the president, Obamacare and Medicaid.

Michael Dittoe, spokesperson for Ohio House Republicans, pushes back at that notion. He points out the state budget will increase funding for Medicaid by $1 billion, allowing 231,000 more Ohioans to enter the system.

“When people say that we’re not doing anything for Medicaid, obviously that’s not true,” he says. “Certainly, we could have gone down the road of not funding that particular provision.”

The increased funding is going to people who are already eligible for Medicaid but, for whatever reason, aren’t currently enrolled. The federal government expects the new enrollees to sign up as a result of Obamacare raising awareness and education about health coverage.

In other words, the federal government already expects Ohio to pay for these Medicaid enrollees. Failing to do so would have likely violated the state’s Medicaid agreement with the federal government and, as Dittoe acknowledges when asked, resulted in penalties.

Although the Medicaid expansion is out of the state budget, there is a bill currently sitting in the House that would take up the expansion. Dittoe says that bill will likely be looked at in the early fall.

For legislators, that might be politically prudent: A poll released June 14 by the Health Foundation of Greater Cincinnati found 63 percent of Ohioans support the Medicaid expansion, with a margin of error of 3.3 percent. The University of Cincinnati's Institute for Policy Research conducted the poll for the Health Foundation between May 19 and June 2.

The $62 billion state budget for fiscal years 2014 and 2015 passed the Republican-controlled General Assembly on Thursday. It’s expected Kasich will sign it into law this weekend.

Check out all of CityBeat’s state budget coverage:
Report: State Budget Tax Plan Favors Wealthy
State Budget's Education Increases Fall Short of Past Funding
State Budget to Limit Access to Abortion

 
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