Medicaid expansion’s fate to be decided Monday

Expansion could help Ohio’s 275,000 working poor.


After pleading with legislators for months in public and behind closed doors, Gov. John Kasich has turned to a panel of six lawmakers and one political appointee to extend Medicaid health coverage to an estimated 275,000 newly eligible Ohioans beginning next year.

The Controlling Board is an entity little-known outside Capital Square. And House Republicans who oppose expansion also oppose Kasich’s latest method to approve it. The controversial expansion would allow any adult earning less than 138 percent of the federal poverty level, about $16,000 for an individual, to qualify for Medicaid. That would include extending coverage to about 26,000 military veterans.

Medicaid expansion could get the OK as soon as Monday, despite protest from Republican lawmakers.

State Medicaid officials say Ohio law permits them to expand Medicaid without the approval of the General Assembly as long as the federal government approves it. The Centers for Medicare and Medicaid Services approved the state’s expansion plan Oct. 10.

The next day, Ohio Medicaid Director John McCarthy requested the state Controlling Board, a panel that controls the state’s checkbook, to release about $2.56 billion in federal funds through 2015. The board is composed of seven members: three lawmakers from each chamber, with two each from the majority party and one from the minority party, and the board’s president, an appointee of the Office of Budget and Management.

It appears Kasich has three yes votes, from the Democrats and his appointee, and the necessary fourth could be found either in Sen. Chris Widener, R-Springfield, who was unavailable for comment, or in a last-minute substitution from the House.

Political maneuver

The final makeup of the board may not be known until Monday’s meeting. Board members can be substituted until the meeting begins. But Senate President Keith Faber, R–Celina, told reporters last week approval is almost certain. He did not go into detail about how his two appointees would vote but said he didn’t plan to sub in other members.

Monday’s vote wouldn’t be the first time the board approved controversial federal funds criticized by conservatives. The board approved $100 million of Race to the Top education reform money in 2010. The board also approved projects paid for with federal economic stimulus money.

Kasich spokesman Rob Nichols said Ohio law clearly authorizes the Controlling Board to approve the request. An opinion from attorneys at Vorys, Sater, Seymour and Pease in Columbus, issued on request of a pro-expansion group, agreed. But some Republican lawmakers, the Buckeye Institute for Public Policy, a conservative Ohio think tank, and other conservatives say expansion is against “the clear intent” of state lawmakers.

House Republicans stripped the Medicaid expansion proposal from Kasich’s two-year state budget earlier this year, but added language explicitly prohibiting expansion. Kasich used his line-item veto power to remove that portion, leaving intact language that authorizes the state Medicaid director to modify the program with federal approval.

Greg Lawson, policy director of the Buckeye Institute, said enacting a policy change of this magnitude through the Controlling Board after blocking lawmakers’ attempt to stop it is unique.

“It can only be looked at as an end around the whole General Assembly,” Lawson said, predicting a board approval would trigger lawsuits. “It short circuits a very needed debate because this is no slam dunk — this is a cumbersome issue.”

Thirty-nine House Republicans protested the move in a letter. Signers included Speaker William Batchelder of Medina, the two House Republicans on the Controlling Board and 10 from the Miami Valley region. The lawmakers say a Controlling Board approval would go against “legislative intent” because the General Assembly included language prohibiting expansion in the budget.

State law prohibits the board from taking “action that does not carry out the legislative intent of the General Assembly.”

Jon Allison, spokesman for Ohio Alliance for Health Transformation, said legislative intent is usually interpreted as what’s on the books, and the anti-expansion language never made it into law. Allison said the alliance — a statewide coalition of more than 140 business, labor, health and community groups — will continue to collect signatures to force the whole General Assembly to vote on expansion.

“Given the intensity of feelings on all sides of this issue, it does not surprise me that this could end up in court,” Allison said. “Whether the Controlling Board passed this or a bill authorized it, I assumed all along that there would be a court challenge.”

Kasich, speaking Friday at the Cleveland Clinic, questioned why lawmakers would so strongly oppose expansion that would benefit Ohio’s working poor, help treat mental illness, drug addiction, and further help veterans.. He asked the audience to “say your prayers this weekend.”

“Is it because they’re hard-hearted or cold-hearted? It’s probably because they don’t understand the problem because they’ve never walked in somebody’s shoes,” Kasich said.

“When we talk about these folks that come into the emergency room and you see them, could you imagine being in the position where you have no health insurance. You have absolutely no health insurance and you wake up and you’re sicker than a dog and you’ve got nowhere to go.”

What’s at stake

By 2022, more than 450,000 Ohioans would be covered under a Medicaid expansion, including more than 100,000 southwest Ohio residents, according to projections from the Urban Institute released earlier this year by the Ohio Health Policy Institute. The expansion was intended to cover working individuals who do not earn enough to buy coverage on the new health insurance marketplaces created by the Patient Protection and Affordable Care Act

The federal government would cover the full cost of expansion for the first three years, before phasing its contribution down to 90 percent.

Republicans first blocked expansion, in part, because of concerns the federal government might decrease its share and leave Ohio to foot the bill. The Controlling Board request says if the federal share drops, the state will not make up the difference.

Ohio would be on the hook for anywhere from $500 million to just over $600 million in the first year it began paying a share of expansion costs. But the influx of federal funds, tax revenue from Medicaid managed care plans, and savings on such items as medical costs for state prisoners would yield a surplus of between $1.6-$1.8 billion to the state budget by the end of the decade, according to the report.

Bryan Bucklew, president and CEO of the Greater Dayton Area Hospital Association, said he’s “cautiously optimistic” Medicaid expansion will happen sooner than later, relieving financial pressures for his organization’s member hospitals.

“Doing the Medicaid expansion is not only good public policy in terms of making sure enough people have coverage, but it’s also the fiscally responsible thing to do for the state of Ohio,” he said. “People fail to realize that if we don’t do the Medicaid expansion, these people who would have been eligible are still going to need medical care.”

The uninsured often head to the nearest emergency room for help when they are sick or injured, leaving hospitals with millions of dollars in bad debt or “uncompensated care” each year, Bucklew explained.

“Those costs ultimately get shifted to people who have insurance and onto taxpayers,” he said. “By covering these (uninsured) individuals now, it’s going to cost everybody less money in the long-term.”

New enrollees are also likely to rely on public clinics, which already care for the majority of Medicaid patients and uninsured in the local area.

About 70 percent of percent of patients at the three Primary Health Solutions clinics in Hamilton and Middletown are on Medicaid, according to Peggy Vazquez, director of clinical operations. Vazquez estimated a Medicaid expansion would increase the number adults at the clinics by about 10 percent.

“We’re not anticipating a dramatic change, but we would see more patients,” Vazquez said.

Most of those new patients are likely to be among the working poor who don’t have employer-sponsored health insurance, don’t earn enough to buy coverage on the new health insurance marketplaces created by the Patient Protection and Affordable Care Act and aren’t poor enough or otherwise qualified for Medicaid under current standards.

“These are not people who are sitting at home doing nothing,” Vazquez said. “They are working and trying to make ends meet, but they can’t get the health care they need.”

Problems continue to grow

But their ranks are growing, said Dennis Sullivan, a Miami University economics professor who teaches classes on poverty and income distribution.

“Think about the recession,” Sullivan said. “How many people lost their jobs? Of those, how many returned to jobs that are part-time and, or, pay less — often much less? If these folks are left without employer-subsidized health insurance, they are in a really tough spot.”

Many working-age adults have already shifted to Medicaid for health coverage. In 1999, Medicaid covered 2.28 million U.S. adults ages 25 to 34, or about 6 percent of the working-age population, according to a report from the Kaiser Family Foundation and the Health Research & Educational Trust. By 2011, coverage grew to more than 6 million working-age adults, or about 15 percent of the population.

In addition to providing health coverage for a vulnerable population that would otherwise be uncovered, expanding Medicaid would also breathe new life into the local economy, said Gregory Hopkins, executive director of Community Health Centers of Greater Dayton, said expansion would also breathe new life into the local economy.

“About a third of our patients are uninsured,” Hopkins said. “If some portion of those uninsured patients would have the ability to cover the cost of our services, it would just help us increase our capacity; add more community health centers, hire more physicians, hire more staff. That means we’ll have the ability to add jobs to the local community.”

Statewide, Medicaid expansion would generate nearly $400 million in new local managed care tax revenue and 27,000 new jobs over the next decade, the Health Policy Institute reported. More than 70 percent of Ohio Medicaid enrollees have private managed care plans.

Lawson said sunny numbers touting expansion vary by report and assume the law will stay intact, while recent events in Washington, D.C. show parts could change.

“We’re assuming all these good things, but no one really knows what will happen,” Lawson said. “The debate should go on a little longer and this whole Controlling Board thing circumvents that.”



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