The state is seeking to allow uninsured adults who earn up 100 percent of the federal poverty level qualify for Medicaid, said John McCarthy, Ohio’s Medicaid director. The federal legislation stipulates that states have to expand Medicaid rolls to include adults who earn up to 138 percent to qualify for federal aid that will, for the first few years, pay the full cost of the expanded coverage.
Kasich is still studying his options and crunching the numbers on the state’s budget forecast before deciding whether to expand Ohio’s Medicaid program, which cost more than $14 billion in state and federal funding last year and covered more than 2 million people. There is no deadline to expand the program under the new federal law.
Expanding Medicaid under PPACA’s existing could add up to one million more people into Ohio’s program, and drive the cost up by more than $4 billion by 2018, McCarthy said. Just adding adults who are eligible under current guidelines for coverage, but not enrolled, could cost $700 million over two years, he said. State officials expect more than 300,000 “woodwork” enrollees because of the publicity about the program’s potential expansion.
But there is a coverage overlap between provisions of the health-care bill, McCarthy pointed out: Uninsured adults who earn between 100 and 138 percent of the poverty level could receive federal assistance to purchase individual health coverage through state insurance exchanges that supposed to be up and running by 2014, McCarthy said.
In June, when the U.S. Supreme Court upheld PPACA, justices ruled that states could choose to opt-in to the Medicaid expansion and accept the additional federal funding to pay for it or choose to opt-out without fear of losing existing Medicaid funding. The expansion, and PPACA overall, are sore points for many states. Some, including Florida, have said they will not participate in the expansion. And others are likely waiting until after the November presidential election since Republicans have vowed to repeal the law if they win a majority. Oklahoma Gov. Mary Fallin said she plans to wait until after the Nov. 6 election to decide what direction her state will take.
Ohio keeps options open
Ohio missed a deadline last week to outline essential benefits that insurers have to cover under PPACA. Ohio Lt. Gov. Mary Taylor, who is also the state insurance commissioner, said the federal government has not provided enough information on the issue. She is an outspoken opponent of the health care law.
Ohio officials have not computed the math to determine how much they could potentially save if the feds sign off on the proposal, said Eric Poklar, spokesman for the Governor’s Office of Health Transformation.
“We’re keeping all our options on the table. It doesn’t make a lot of sense to run all those numbers until we get a better idea of what the feds will allow us to do,” he said.
Federal officials say they have taken Ohio’s question under advisement.
“We are evaluating this question,” said Fabien Levy, press secretary for the U.S. Department of Health and Human Services, in an email. “We are hopeful states will take advantage of the substantial resources available to them to cover more of their residents through the Medicaid program. Under the Affordable Care Act, Medicaid eligibility expansion is completely paid for by the federal government in the first three years and the federal government will cover at least 90 percent of these costs in the years thereafter.”
Other states, including Arizona, have spotted the same overlap in PPACA and are asking the same question, said Judy Solomon, vice president of health policy at the Center on Budget and Policy Priorities in Washington, D.C.
“This is a hot question from many states right now, clearly because it has a significant impact on how much the expansion would cost the states, in particular, over time,” Solomon said.
Federal funding for the Medicaid expansion would taper off over time, and states, if they opted to remain in the expanded program, would pick up the cost. But there is no sunset on the subsidies and tax credits for qualifying individuals who purchase their own health insurance through the exchanges.
If the federal government signed off on the change, it would, in essence, shift at least part of the coverage cost from states to the federal government for the long haul. If Ohio adopts the expansion, a July analysis from the Urban Institute estimates costs for the program would increase between $172 million and $1.3 billion between 2014 and 2019.
“The real question is going to be what state is not going to want to do that, even those states that are committed to expanding Medicaid,” Solomon said. “That is really going to be the big question.”
Costs for expanded coverage
There is no deadline to join in on the expansion, though full federal funding only continues for the first few years. States can also join in, then leave again, if they choose.
Federal officials estimate that subsidizing private health insurance through the exchanges will cost $3,000 more per person than Medicaid coverage, said Alan Weil, executive director for the National Academy for State Health Policy in Washington, D.C. The increase is because Medicaid pays doctors and hospitals significantly less than private health insurance does.
“It’s hard to imagine the government agreeing to do that at their own expense,” he said. “I can see why a state might want to do that, but I don’t think it’s going to happen.”
Cathy Levine, executive director of Universal Healthcare Action Network of Ohio, a pro-Obamacare organization in Columbus, called reducing the scope of Medicaid from PPACA’s tenets “a terrible idea.”
“But what I’m hearing from Director McCarthy and the Kasich administration is that they are exploring their options, that they are doing due diligence, and I’m cautiously optimistic that, in the end, they’ll do what’s best for Ohio, which is to do the full expansion of Medicaid.”
Sending adults who earn between 100 and 138 percent of the federal poverty level will leave them under-insured, Levine said, and those people are more likely to skip seeking care because they can’t afford deductibles, co-pays and other costs as well as their insurance premiums.
“They will continue to burden the health care system, and it undercuts the ability of the administration to reshape the delivery system. The more people we have in Medicaid, the more we can influence the needed transformation of the health care system so that we’re paying for value, not for volume, so that we’re paying for good outcomes.”
It does not make sense to leave federal dollars on the table, Levine said, but she expects Kasich will agree to expand Medicaid as outlined under PPACA.
“It makes sense to make the decision in the context of the state budget, and it makes sense that they’re taking the time to study the issue so that they’ll be able to respond to critics of the Medicaid expansion that they’re considering all of the alternatives,” she said. “I have confidence in their leadership and I think in the end that they’re going to concede that the best option for the health of Ohio and the health of Ohio’s economy is to do the full Medicaid expansion.”
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