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Expanding Medicaid could save Ohio big bucks, report says

If Gov. John Kasich’s administration decides to expand Ohio Medicaid under the federal Affordable Care Act, 450,000 Ohioans would gain health care coverage and the state would save money over the next eight years and then break even in the outlying years, according to a report issued Tuesday by four non-partisan policy groups.

Expanding Medicaid to cover more low-income Ohioans is projected to save Ohio $1.4 billion between 2014 and 2022, according to the analysis from the Health Policy Institute of Ohio, Ohio State University, Urban Institute Health Policy Center and REMI.

However, the groups declined to advocate in favor of expansion, saying that they just want to present non-partisan research for decision makers to consider.

In June 2012, the U.S. Supreme Court upheld the constitutionality of the Affordable Care Act, with the exception of the provision that would have required states to expand Medicaid. The court ruled that the federal government cannot force states into expanding Medicaid.

Ohio Medicaid is a state and federally funded health care program that currently covers about 2.3 million low-income, disabled and elderly Ohioans. It costs roughly $19 billion a year.

Kasich, who is a critic of the federal health care law, initially expressed reluctance toward expansion. The administration is concerned about the cost of the “woodwork effect” — when tens of thousands of Ohioans who are currently eligible but not enrolled sign up for Medicaid. In January 2014, the Affordable Care Act mandates that individuals have health care coverage. (Nationally, about two-thirds of Medicaid-eligible Americans are currently enrolled.)

Kasich’s expansion decision will be revealed with his upcoming 2014-15 state budget proposal, which is scheduled to be released Feb. 4.

The Affordable Care Act promises to cover 100 percent of the Medicaid expansion enrollees for the first three years and then slowly dial it back to a 90 percent match rate by 2020 with the states picking up 10 percent of the cost. The current split is about 64 percent federal, 36 percent state.

HPIO and its collaborators found that expanding Medicaid would allow the state to shift some health care costs now borne by Ohio to the federal government, such as inpatient hospital care for state prisoners and mental health treatment for currently uninsured poor people. Also, Ohio could receive more money in taxes on managed care plans and more cash from prescription drug rebates, if the program is expanded, the study found.

“This analysis is not inconsistent with what we have heard from the wave of hospitals and other stakeholders that have been urging the state to expand Medicaid,” said Eric Poklar, spokesman for Kasich’s office of health transformation. “We will continue to review all of the data at our disposal and feedback from stakeholders, both for and against, and recommend in the budget a course of action that is best for Ohio.”

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