Governor Kasich Still Considering Costly Medicaid Expansion

Ohio Governor John Kasich is expected to detail in a February 4 budget proposal his plans for expanding Medicaid eligibility as called for by the federal Patient Protection and Affordable Care Act (PPACA). Kasich, a Republican, faces pressure from a chorus of liberal groups devoted to increasing the size of government, as well as from providers backed in a corner by PPACA.

The following chart from the conservative Heritage Foundation depicts the time-bomb that is Washington entitlement spending.

Heritage tax and spending graph

Though his administration suggested expansion was unlikely when the U.S. Supreme Court’s 2012 PPACA decision gave states the freedom to opt out, Kasich now appears to be leaning toward some increase in Medicaid eligibility. A January 15 Health Policy Institute of Ohio (HPIO) study emphasizing the benefits of vastly increased federal spending for Medicaid in Ohio may act as his political cover.

In a January 16 interview with The Columbus Dispatch, a spokesman for the governor seemingly set the stage for expansion by mentioning a “wave of hospitals and other stakeholders that have been urging the state to expand Medicaid.”

On January 18, free market think tank Opportunity Ohio released several conservative policy experts’ responses to the HPIO study. Whether their feedback affects Kasich’s decision is yet to be seen.

Directing the Ohio General Assembly to expand Medicaid eligibility would stand in sharp contrast to Governor Kasich’s previous complaints about Washington’s unsustainable spending.

In his August 20, 2011 Weekly Republican Address, Kasich criticized the federal government’s routine deficits. “Our success in Ohio, and in a number of other states, will be thwarted if Washington continues its spending spree and its punitive taxes on success,” he said. “You know, if we’ve learned anything from the federal stimulus, it’s that government can’t tax, spend, and regulate its way to prosperity.”

Kasich continued, “Government shouldn’t be making promises it can’t keep – especially when it’s more than $14.5 trillion in the hole.”

At publication, the national debt exceeds $16.4 trillion.

However, Governor Kasich will be seeking reelection in 2014, which could make him more likely to surrender to arguments framing federal funds as free money.

During an August 2012 interview on the Coffee and Markets podcast, Kasich insisted he was undecided on Medicaid expansion, saying that “I’ve instructed my staff to begin to talk to Democrat and Republican staff members for governors to see if there’s a way that we can carve something out here.”

Pro-expansion talking points have been simple and consistent: poor Ohioans will die if Medicaid is not expanded, the additional costs are nothing to worry about, and the federal government will foot most of the bill.

In July 2012, progressive think tank Innovation Ohio trumpeted a study claiming “Medicaid expansion could save 3,400 Ohio lives.”

“Gov. Kasich, who never tires of telling us how ‘pro-life’ he is, remains undecided about the expansion,” Innovation Ohio Communications Director Dale Butland said. “But surely being ‘pro-life’ should include more than just being anti-abortion.”

In October 2012, the Cleveland Plain Dealer reported that the Universal Health Care Action Network of Ohio (UHCAN Ohio) and the left-leaning Urban Institute disputed Kasich’s Medicaid cost estimates as alarmist. As its name would suggest, UHCAN Ohio is a socialized medicine lobbying group.

The day after President Obama’s reelection, liberal think tank Policy Matters Ohio announced that “Medicaid expansion would help 900,000 Ohioans.”

On January 24, 2013, Greater Cleveland Congregations (GCC) – an affiliate of Saul Alinsky’s Industrial Areas Foundation designed to co-opt religion for progressive causes – held a rally demanding that Ohio expand Medicaid.

“We believe that opening access to life-saving health insurance to 600,000 Ohioans through the Medicaid program is the right thing to do for Ohio’s people, for our economy and for our state’s fiscal health,” GCC co-chair Reverend Tracey Lind told attendees at the event.

The Cleveland Plain Dealer has enthusiastically cited organizations calling for expanding Medicaid. In a January 26 column, the Plain Dealer’s liberal editorial board officially endorsed Medicaid expansion.

“Luckily, it’s likely that Kasich will call for Medicaid expansion when he introduces his 2013-15 Ohio budget proposal next week, despite his ideological distaste for the Affordable Care Act, aka Obamacare,” the editors wrote. “If so, Kasich will be acting in the best interests of all Ohioans. So will the General Assembly if, as it should, it concurs in Medicaid expansion.”

The Dayton Daily News explained in a January 18, 2013 story that providers’ pleas for expanded Medicaid eligibility are driven in large part by another provision of PPACA.

“Disproportionate Share Hospital, or DSH, adjustment payments to hospitals for treating patients with no insurance will be reduced by 75 percent across the board beginning in 2014, then cut incrementally each year through 2020,” Dayton Daily News reporter Randy Tucker wrote.

In other words, PPACA will “save” money by cutting payments to cover the uninsured – and pushing the uninsured into Medicaid. Hospitals will have fewer new costs to pass along to customers, and America’s health care industry will be further distorted by unsustainable deficit spending.

Should Kasich direct Ohio’s Republican-controlled legislature to expand Medicaid, he will join the ranks of several other Republican governors afraid of, in the words of Governing magazine, “missing out on hundreds of millions of federal dollars.”

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