Ohio

Gov. Kasich’s Medicaid Arguments Mirror Strickland’s Pleas for Passenger Rail Spending

Policy

Governor John Kasich has defended his decision to expand Medicaid eligibility in Ohio with logic he rejected when killing a “high-speed rail” project barely two years ago. Governor Ted Strickland, a Democrat, emphasized the need to goose Ohio’s economy using our “fair share” of federal funds – an argument Kasich, a Republican, is now employing to justify Medicaid expansion.

The 2010 Patient Protection and Affordable Care Act (PPACA) was designed to add millions of Americans to Medicaid by promising generous funding to compliant states – and by withholding all Medicaid funding from states that refused to raise the eligibility cap to 133 percent of the federal poverty line.

Despite the U.S. Supreme Court’s June 28, 2012 ruling that current Medicaid funding could not be contingent on expanding the program, Kasich and several other Republican critics of PPACA have announced plans to expand Medicaid anyway.

“Without this move Obamacare is likely to increase health insurance premiums even higher in Ohio,” Kasich wrote in a February 6 RedState post. “Worse, it takes $13 billion of Ohioans’ federal tax dollars out of our state and gives it to other states—where it will go to work helping to rev up some other state’s economy instead of Ohio’s.”

As Washington Examiner writer Philip Klein opined on Twitter, “Kasich basically argues he had to expand Obamacare to limit its damage.”

Medicaid saves money by paying care providers less than private insurance does, a distortion of America’s health care market that will only get worse with PPACA implementation. Extending the unsustainable promises of Medicaid will grow the program’s costs and complexity while diminishing any future hope of market-based reforms.

Even assuming mechanisms in PPACA meant to force providers to continue accepting Medicaid patients are effective, Kasich could easily be mistaken for his predecessor by asserting federal spending will “rev up” the state’s economy.

“I see it as a huge missed opportunity. We’re talking about $400 million being given to another state,” Governor Strickland said when Kasich was elected and asked him to end all passenger rail spending. “This money will not be used to reduce the deficit. It will be used for passenger rail, and it will be used by another state to create jobs in that state. And Ohio will be left out… I think this is a tragedy for our state.”

Under Strickland, the Ohio Department of Transportation submitted a proposal to the Federal Railroad Administration (FRA) requesting half a billion in federal funds for a “3C” passenger rail project connecting Cincinnati, Columbus, and Cleveland.

Trains on the 3C rail system would have traveled at a top speed of 79 miles per hour, with average speeds somewhere between 35 and 55 miles per hour depending on the final configuration of lines and stations. The Strickland administration enthusiastically cited an Amtrak estimate that 478,000 passengers would utilize the 3C rail each year.

Ohio’s population in 2010 was 11,536,504 according to the U.S. Census Bureau. A projection that slightly more than 4 percent of the state’s population would ride the 3C trains was enough to convince FRA to allocate $400 million in American Recovery and Reinvestment Act funding to the plan.

Like PPACA, the 3C rail proposal was championed by progressive think tanks, activists, and journalists, especially at The Toledo Blade. As progressive thought would have it, taking taxpayer money, sending it to Washington, sending it back to the states, and then spending it on programs with little regard for future costs is terrific economic policy.

A sustained cry went up from progressives across the state when, upon his election, Kasich announced, “That train is dead.”

Two years later, Governor Kasich is playing the role of federal spending enthusiast.

“Whenever federal resources are being distributed to the states—and there’s nothing we at the state level can do to prevent that spending—then Ohioans shouldn’t be robbed of their fair share,” wrote Governor Kasich in his February 6, 2013 defense of Medicaid expansion. “Ohioans earned that money, it’s theirs, and they deserve it just like citizens of every other state.”

President Obama’s nationwide passenger rail initiative was intended to be a signature piece of his legacy whether state officials complied or not, albeit on a smaller scale than PPACA.

“The reason that Ohio is connected to an interstate system that runs all over America is because it was a national plan. Ohio will be connected,” Transportation Secretary Ray LaHood told a union group in Ohio during the 2010 gubernatorial campaign.

As with PPACA, massive tax expenditures on a national passenger rail system could only be stopped by leaders making a firm, convincing case against the Keynesian program.

As the National Review editors wrote in a February 6 story, “The critical difference between the Medicaid expansion and most other federal subsidies is that governors are in a position to resist the expansion of Medicaid if they so choose: The Supreme Court has made it abundantly clear that the federal government may not coerce the states into cooperating with the Medicaid expansion, and if enough states opt out, the expansion cannot work. Governor Kasich is marching in the Obamacare parade by his own volition.”

[Editor’s note, 02/15/2013: Corrected the PPACA Medicaid ceiling figure to 133 percent of the federal poverty line from the widely-reported but inaccurate 138 percent.]

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