Buckeye Institute Details its Opposition to Medicaid Expansion

Expanding Medicaid is the wrong decision for Ohio, according to a January 31 policy report from The Buckeye Institute for Public Policy Solutions, a free market think tank in Columbus.

The report, written by Buckeye Institute president Robert Alt and policy analyst Greg Lawson, listed six major reasons Ohio should not expand Medicaid eligibility. Alt and Lawson addressed what they viewed as errors and oversights from a Health Policy Institute of Ohio (HPIO) study released in January.

First, Alt and Lawson pointed out that future reductions in federal Medicaid funding could increase the direct financial burden on Ohio’s taxpayers. Their report included a reminder that federal debt is already greater than $16 trillion, before adding that “the federal Medicaid share for FY 2014-2022 will total a staggering $3.056 trillion” based on U.S. Department of Health and Human Services (HHS) estimates.

The Medicaid expansion called for by Governor John Kasich as part of his budget proposal released February 4 would supposedly include provisions for Ohio to reduce eligibility if HHS changes the rules, but this seems politically unlikely.

The Buckeye Institute report next highlighted the administrative costs of expanding Medicaid in Ohio, an expense which HPIO “makes no attempt to include” in its calculations. HHS has estimated that states will be responsible for $12 billion of a total $26 billion increase in Medicaid administrative costs from 2010-2019.

Referring to the January 2013 HPIO report, Alt and Lawson wrote, “Using the additional enrollment cost estimates in the Expanding Medicaid report, Ohio will incur at least another $137 million in administrative costs between 2014 and 2022 if it chooses to expand Medicaid.”

Next, the Buckeye Institute paper noted that projected gains from increased sales tax revenue would be subject to shifting regulations.

“President Obama has already recommended phasing down the Medicaid provider tax threshold from its current cap of 6 percent to 3.5 percent,” the Buckeye Institute report explains. “This would greatly reduce the income projections relied upon in the Expanding Medicaid report.”

The fourth section of the Buckeye Institute report detailed numerous other flaws in the HPIO report – which projected Ohio’s economy would net $1.4 billion between 2014 and 2022 if the General Assembly were to expand Medicaid eligibility.

Alt and Lawson emphasized that “the report’s projections are based upon unsustainable current federal spending levels that may be changed at any time, and on taxes, which are the subject of federal scrutiny, and may be phased out as well.”

The HPIO report also assumed that absent Medicaid expansion, PPACA’s mandates would not drive currently uninsured low-income individuals to purchase health insurance. Although health policy experts including Michael Cannon of the Cato Institute and Hadley Heath of the Independent Women’s Forum assert that PPACA cannot work in Ohio or other states without state exchanges, no one is certain how many years may pass before gravity takes its toll.

“Even using optimistic presumptions, the [HPIO] report shows that the overall costs of the expansion come close to outstripping the savings and new revenues by Fiscal Year 2021,” the Buckeye Institute added.

Fifth, Alt and Lawson cited various studies showing higher mortality rates for surgical patients on Medicaid, and reminded readers that “low Medicaid reimbursement rates leave many primary care physicians unwilling to accept Medicaid patients, meaning that there will continue to be an access problem for many entering the program.”

Finally, the Buckeye Institute report pointed out that Medicaid spending “already accounts for around 30 percent of the state budget.”

“Such an expansion of government is inconsistent with conservative or free-market principles,” Alt and Lawson concluded. “The ACA transforms a limited safety net program into a vast welfare program—one which is likely to become entrenched, to cost huge sums, and to serve enrollees less well than the alternatives.”

“The expansion also appears to be inconsistent with the wishes of Ohio voters, who expressed their strong disapproval of the ACA in 2011 when they passed the Ohio Health Care Freedom Amendment by a nearly 2-1 margin.”

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