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Big money behind Medicaid fight

Threat of ballot issue drives alternative plans to expand program that covers 2.3M Ohioans.

About 45 percent of births in Ohio are paid for by Medicaid, a program now in the throes of a major spat over whether to expand it and how.

Behind the issue are high stakes politics and big money.

The Ohio Alliance for Health Transformation, a coalition of more than 140 organizations including heavy hitters such as the Ohio Chamber of Commerce and the SEIU labor union, is publicly threatening to take the question to a statewide vote if lawmakers fail to act soon.

“If we get to July 2 and there’s not a clear legislative path or there’s not a pathway, I think there will be a lot of folks who are proponents of Medicaid expansion who immediately will want to start talking about all their options, which of course will include taking it to the ballot in 2014,” said Jon Allison, a long-time, well-connected Republican lobbyist who is leading the charge for the diverse coalition of labor, business and health care groups that formed the health transformation alliance.

Lawmakers are scrambling to put forth alternative Medicaid expansion proposals after tossing aside Gov. John Kasich’s plan just weeks ago. But it’s unclear whether any of the new bills will clear the substantial hurdles: satisfy key business groups, gain federal approval, appease anti-Obamacare conservatives and win over a majority vote in both the House and Senate.

“It is a big lift,” said Janet Grant, executive vice president of Dayton-based CareSource, which manages the largest Medicaid plan in Ohio.

Yet Grant and other advocates in the alliance say they are becoming more optimistic that a stand-alone bill will be passed this month to address Medicaid expansion and reforms.

“My honest opinion varies day by day,” Grant said. “I am feeling confident right now because I see work happening.”

$13B at stake

Medicaid is a state and federally funded health care plan that covers 2.3 million low-income and disabled Ohioans, costs $19.8 billion a year, is the largest payer of nursing home care in the state. About 1.15 million children are covered by Medicaid.

In June 2012, the U.S. Supreme Court upheld the federal Affordable Care Act and gave states the option of expanding the program to cover adults who make up to 138 percent of the federal poverty level. The health care law says the feds will pay 100 percent of the costs for newly eligible enrollees for the first three years and then dial back the match to 90 percent in the outlying years.

For Ohio, this translates into $13 billion in federal money over seven years and health care coverage for an additional 275,000 low-income citizens. It would also reduce the hit hospitals take in providing charity care and allow employers to sidestep more than $70 million in penalties if their workers don’t have access to Medicaid coverage.

However, conservative lawmakers loathe the idea of embracing ‘Obamacare’ and they see a direct link between expanding Medicaid and ballooning the federal deficit. They are also concerned that once the states go for expansion, the feds will change the rules.

Kasich surprised some people earlier this year when he came out strongly in favor of a plan to expand Medicaid eligibility to adults making up to 138 percent of the federal poverty level, which is $32,500 for a family of four. He included a circuit breaker to cancel the expansion if the feds fail to live up to funding promises, and put in other reforms, such as simplifying the eligibility categories to cut through red tape and upgrading the computer system that handles Medicaid client records.

The legislature balked at the Kasich plan, but several other proposals are being floated. State Rep. Barbara Sears, R-Sylvania, proposed the same changes as in the Kasich plan but calls for reforms such as enrolling 80 percent of Medicaid recipients in private sector plan, banning drug addicts from getting narcotics they abuse through the health care system, and promoting employment services to assist adult Medicaid recipients to get into the workforce. The expansion program would also sunset in June 2015 so that the General Assembly would have a say in whether to renew it.

House Finance Chairman Ron Amstutz, R-Wooster, is working with Democrats and Republicans in both the House and Senate on a reform plan. Details are not yet available but Amstutz said the bill will address two goals: a more efficient system and help enrollees eventually get off Medicaid.

Republicans Jim Butler of Oakwood and John Adams of Sidney, who oppose expanding Medicaid, plan to roll out a bill this summer to push changes that will cut costs, reduce the number of people on Medicaid, and improve the quality of care.

Ballot perils

The threat of a statewide ballot issue appears to be a factor in the amount of serious attention and study that the question is receiving.

“I don’t know anybody who wants this on the ballot,” said Scott Borgemenke of the Ohio Hospital Association and a long-time Republican operative. “At the end of the day, the cleanest and best way to take care of this is through the legislative process.”

Republicans are cognizant of the potential perils of having a Medicaid expansion question on the 2014 ballot — the same time that Kasich and other Republicans are running for re-election.

Kasich, who is pushing hard for Medicaid expansion, would be obligated to campaign for the issue. And the question would likely drive voter turnout by progressive Democrats who favor expansion and tea party and Libertarians who oppose it.

“Drive out the Ds and split some of the Rs. I haven’t done the research on it but my gut says that’s a possibility,” said Allison, who served as Bob Taft’s chief of staff.

Medicaid is a behemoth in the state budget and a very complex government program. In the past, lawmakers have ceded the details to a handful of self-made Medicaid experts in the General Assembly. This time around, though, just about every lawmaker is digging in deep to understand the details, according to Allison and Grant.

But Anthony Caldwell of SEIU District 1199, which is a member of the Ohio Alliance, blames the delays on partisanship.

“Democrats, Republicans, Independents will all benefit from Medicaid expansion. This does not have a party label on it and it’s really unfortunate that it’s being delayed by partisan politics,” Caldwell said.

“A lot of the people arguing back and forth on this issue are blessed to have health care,” he said. “What really needs to happen is to keep in mind the people who don’t have health care coverage at all.”

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