Ohio

Medicaid Expansion Would “Save” Money by Increasing State, Federal Spending

Policy

Governor John Kasich and other supporters of expanding Medicaid in Ohio make a strange economic case for the Patient Protection and Affordable Care Act (PPACA) Medicaid expansion, portraying millions in new state spending as responsible because it would be offset by billions in new federal spending.

The left-leaning Urban Institute, in estimates the Kaiser Family Foundation released last November, projected that Ohio’s adoption of the PPACA Medicaid expansion would increase federal Medicaid spending by over $53 billion and Ohio’s Medicaid spending by more than $4 billion through 2022.

Both the Urban Institute and Ohio State University estimates included in a recent Health Policy Institute of Ohio (HPIO) study – which has been championed as proof Ohio would gain jobs, entitlement benefits, and tax revenue by expanding Medicaid – indicate the PPACA Medicaid expansion would increase Ohio’s annual Medicaid costs by more than half a billion dollars by 2021.

Urban Institute estimates are shown in the following chart.

ohio-medicaid-expansion-cost-2014-2022

Ohio’s Medicaid costs would increase by hundreds of millions of dollars per year if the Ohio General Assembly were to implement the PPACA Medicaid expansion. According to the governor, the health care lobby, and socialized medicine advocates, these costs would be worth it because they would secure billions per year in new federal funds from a government already $16.7 trillion in debt.

Where would the new federal funding come from? “Don’t worry about it” might be the answer of Medicaid expansion proponents, if Ohio’s press even bothered to ask.

According to HPIO, the PPACA Medicaid expansion would “Strengthen Ohio’s economy by bringing in federal resources that have already been set aside for Medicaid expansion, creating tens of thousands of jobs within the state’s borders.”

HPIO did not explain how a federal government that has run $1 trillion deficits each year since President Obama took office can “set aside” billions per year into perpetuity without even passing a budget since before PPACA was written.

With the projected costs in mind, how did renowned fiscal hawk John Kasich choose to embrace the PPACA Medicaid expansion as part of his fiscal 2014-2015 state budget?

Governor Kasich sought no guidance from leading free market policy experts before making his decision, and has worked with socialized medicine lobbyists to pitch bigger central government and deeper debt as beneficial to Ohioans.

Whether justified as necessary for Ohio’s poor, Ohio’s budget, or Ohio’s hospitals, Kasich’s pursuit of Medicaid expansion funds is a deliberate attempt to drag Ohio deeper into the hall of mirrors that debt-financed federal subsidies represent.

To that end, Governor Kasich has misrepresented how PPACA Medicaid expansion funding works, falsely assuring the General Assembly that “Ohio’s” federal Medicaid expansion funding will be spent in other states if Ohio rejects the expansion. This should have been a major news story six weeks ago, but Ohio’s media were too busy repeating Kasich’s talking points and ridiculing the expansion’s opponents.

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