Ohio

Ohio Legislators Still Considering “Private” Obamacare Medicaid Expansion

Policy

The U.S. Department of Health and Human Services (HHS) issued a March 29 memo explaining how severely restricted states using federal Medicaid expansion funds to pay for private health insurance would be, but a week later The Columbus Dispatch reported that Representative Barbara Sears (R-Monclova Twp.) still hopes to “seek federal approval of a pilot program” to do exactly that.

Arkansas Governor Mike Beebe, a Democrat, wants legislative support for such a “private option” or “hybrid” expansion of Medicaid, which Ohio’s Republican Governor John Kasich is also reportedly open to.

At Forbes, conservative health policy expert Avik Roy described HHS’s terms for using Patient Protection and Affordable Care Act (PPACA) Medicaid expansion funds to buy private coverage as “a kind of private-sector window dressing on the dysfunctional Medicaid program.”

“Basically, what HHS states in its memo is that its deal with Arkansas is not that different from its traditional endorsement of the use of private managed-care plans to administer the Medicaid benefit,” Roy wrote. “But HHS explicitly states that these private plans cannot modernize the design of Medicaid insurance to make it more cost-effective.”

Noting Medicaid’s well-documented access problems, Roy continued, “It’s not clear that the faux-exchange plans, the ones that would be offered to the [PPACA]‘s Medicaid expansion population, will be able to pay doctors and hospitals at rates that are comparable to the higher rates offered in the commercial insurance market.”

“Paying providers at private-sector rates costs more money.”

Roy concluded, “if you were cynical, you could imagine that HHS is trying to make a display of showing flexibility now, because the agency knows that it can withdraw that flexibility later on, after the coverage expansion has been implemented, and states have relinquished their negotiating power.”

“The details will reassure many Medicaid advocates, who were worried that the current administration would weaken long-standing protections of the entitlement program in exchange for Republican buy-in,” Margot Sanger-Katz reported at NationalJournal. “But the rules also could discourage some on-the-fence states from pursuing a Medicaid expansion at all.”

“With the document released Friday, HHS explained that it would only approve such a plan if it also included funding for the extra benefits, kept the usual, low Medicaid copayments, and could be shown to be cost-effective for the federal government, when compared to a traditional program,” Sanger-Katz explained. “It also said that if states want to require private plans, instead of just offering them as an option, it will have to apply for a special waiver.”

Rep. Sears, the House Majority Floor Leader, is also a member of the Health and Human Services Subcommittee of the House Finance and Appropriations Committee, which heard testimony from Buckeye Institute President Robert Alt on March 13 that any HHS promises of “temporary” Medicaid expansion were illusory.

A “hybrid” or “private option” approach does nothing to address the central problem with PPACA Medicaid expansion: there is no money to pay for it. And, as Roy explained, the federal government made clear in late March that any such bargain would be sharply constricted.

These issues are of no concern to lobbying groups eager for new public funds. Last week Greater Dayton Area Hospital Association CEO Bryan Bucklew told the Dayton Daily News, “we haven’t heard what an alternative plan would be. I don’t think plan B should be to not do anything.”

Incredibly, Governor Kasich – who has prided himself on streamlining Ohio’s existing Medicaid program – has adopted the hospital lobby’s rhetoric, equating the rejection of unsustainable new federal spending and mandates with doing nothing.

By framing PPACA Medicaid expansion funding as free money and portraying a bigger entitlement state as compassionate, Kasich seems intent on pressuring Republican legislators into accepting the funds even though doing so would put America deeper in debt and put Ohioans on the hook for higher taxes.

Details of an alternative plan are expected from Rep. Sears later this week.