Under the Affordable Care Act, Ohio has the option to expand Medicaid, beginning January 2014, to uninsured individuals who earn up to 138 percent of the federal poverty level, roughly $15,400 a year. Gov. John Kasich has argued, reasonably, that it is necessary to examine the potential policy and budget impacts before deciding one way or another.
An independent analysis of likely effects released last week presents solid grounds for expanding the health program for poor Ohioans. The report, the first of several planned by the Health Policy Institute of Ohio, in partnership with Ohio State University, the Urban Institute and Regional Economic Models Inc., offers thorough and credible examination policymakers can hang a decision on.
The law requires the federal government to pay 100 percent of the cost to cover newly eligible Ohioans from 2014 through 2016. Thereafter, the federal share declines gradually to 90 percent in 2020 and beyond. Late last year, the feds denied permission for partial expansion, leaving Ohio with a take-it-or-leave-it decision. States can participate in the expansion when they want (though the 100 percent coverage is good only through 2016) and drop out when they want.
Given this deal, the study projects that if Ohio expands Medicaid, the costs of increased enrollment would amount to $2.5 billion from 2014 through 2022. But those costs would be offset by significant budget savings and increases in state revenues. For instance, groups that immediately would be eligible — such as adults who otherwise would spend down to qualify, women with breast and cervical cancer, mental-health clients and virtually all prison inmates — would attract the higher federal share of costs, for an estimaerd $1 billion in state budget savings.
Not to be forgotten either, revenues would accrue from the economic activity — increased employment and sales — that come with the flow of billions of federal dollars into the state and local economy. Taxes on Medicaid managed-care premiums, for instance, would generate an estimated $387 million for Ohio counties. Total revenue increases would be $2.89 billion. Between the savings and revenues generated, Ohio would realize a net budget gain of $1.4 billion over the nine years.
If the budget impact is crucial, the human impact is no less so. An estimated 1.5 million Ohioans currently are uninsured, the cost of the health services they use borne directly by care providers and indirectly, in higher premium costs, by employers and the insured. Expanding Medicaid would reduce the number of the uninsured by close to 1 million, affording them the health benefits easier access to care bring.
The preliminary analysis shows that for the savings and revenues from an expanded Medicaid “would exceed the relatively modest net state costs.” Any good reason not to go for it?