OPINION

Opinion: Ohio has a ticking Medicaid time bomb

Jason Hart
Opinion contributor
Gov. John Kasich will push tax reform and support his Medicaid expansion in his second term.

Gov. John Kasich’s administration is trumpeting the benefits of billions of dollars per year in new federal welfare spending, but Ohioans will pay the price for his decision to extend Medicaid coverage to able-bodied, working-age, childless adults.

When Kasich expanded Medicaid five years ago, he said there would be 447,000 expansion enrollees in 2020. Costs for the first seven years, Kasich said, would total $13 billion in "Ohio’s tax dollars," and the spending would help solve our opioid abuse epidemic.

Although enrollment surpassed the governor’s seven-year projection in 10 just months, Ohio’s drug overdose death rate continued to climb. In less than five years, Kasich’s Medicaid expansion has cost taxpayers more than $19 billion – driving a massive 35 percent increase in Medicaid spending from 2013 to 2017.

Under Obamacare, nearly all Medicaid expansion costs are covered by federal taxpayers; the feds never had so much as a dime of Ohioans’ taxes set aside for this purpose, and only a sliver of the new welfare program’s spending has gone toward addiction treatment. Obamacare promises states will never pay more than 10 percent of their expansion costs, but no one – including Kasich – expects the federal government to keep that promise.

Lobbying congressional Republicans to work with Democrats on an Obamacare bailout last July, Kasich wrote in a New York Times op-ed that "states cannot expect the federal government to continue paying 90 percent of Medicaid expansion costs given our nation’s historic debt," asserting that states "must accept a gradual return to traditional cost-sharing levels."

If federal funding for Medicaid expansion matched the traditional Medicaid rate, the state’s share of expansion costs would more than triple. Ohio pays roughly 37 percent of the benefit costs for the children, the elderly, the blind, the disabled, pregnant women, women being treated for breast or cervical cancer, and the impoverished families who were eligible for Medicaid before Obamacare.

That’s why Kasich, at an Ohio Department of Medicaid press conference last month, complained that Ohio would not be able to afford Medicaid expansion if Congress cut federal funding from the existing rate, which Kasich conceded last year was unsustainable.

Excluding tens of trillions of dollars in future Social Security and Medicare liabilities that the feds cannot pay for, the federal government was $16 trillion in debt when Kasich opted in to Obamacare’s Medicaid expansion, and is $21 trillion in debt today. The question is when, not whether, federal Medicaid expansion funding will be reduced.

With a Republican supermajority legislature and a recovering economy, Kasich could have rejected the promise of new federal deficit spending and worked with care providers, charities, conservative lawmakers and free market policy groups to implement reforms that would have made it easier for the poor to get health care and easier for the state to fight opioid addiction. Instead, Kasich made 700,000 Ohioans more dependent on the federal government during an economic recovery.

After the next downturn hits, Ohio will likely have 1 million able-bodied, working-age adults on Medicaid under Obamacare. Because the basic laws of economics still apply, Medicaid expansion enrollment will spike exactly when the state is least able to pay its share of the costs, even if Congress continues to delay cutting the program’s unsustainable federal funding.

If Ohio’s current governor is back on the campaign trail by the time Medicaid expansion blows up in our faces, his successor will be left picking up the pieces. Unfortunately for Ohio taxpayers, neither Rich Cordray nor Mike DeWine appears willing to defuse the fiscal bomb Kasich set.

Jason Hart is a Miami University graduate, lifelong Ohioan and freelance, free market health and labor policy analyst.

Jason Hart