Strickland Heads Wrong Way on Medicaid
In his State of the State address, Governor Ted Strickland laid out some new proposals for Medicaid in Ohio. Unfortunately, he did not address the program’s core problems and will likely worsen Medicaid’s negative impact on the state budget. The governor should have followed the lead of states that have moved to rein in the program’s costs and improve its service to recipients. Instead, he chose to expand Medicaid in its current unsustainable form.
The governor’s plan involves expanding Medicaid eligibility for children and adults, and allowing some Ohioans to use program credits to buy private health insurance.
The problem with Medicaid in Ohio is not that its requirements are too strict. Rather it is too expensive and recipients receive poor health care. However, the governor did not address these issues. In fact, his proposals would likely make Medicaid’s problems worse. Allowing more people to become part of a system that is already expensive and overburdened makes little sense.
In the past few years, Medicaid spending has grown at a rate from six percent to nine percent a year. This year, due to an improved economy and actions to restrain the cost of the program, spending actually went down slightly. However, the overall trend indicates that Medicaid spending will continue consuming a large portion of the Ohio budget. It already takes up around 40 percent of state expenditures.
Ohio cannot afford to see this number grow without limits. Governor Strickland’s plan will do just that. By expanding the income limits for those eligible for Medicaid, he is only adding to the burden the program places on taxpayers. And to the detriment of those who will go on Medicaid, he is also moving people into a system that produces a consistently poor quality of care.
It is unfortunate the governor did not take the opportunity to call for a complete overhaul of the program. By following the lead of states like Florida and South Carolina, he could have championed changes that would return Medicaid to a fiscally responsible path, and improve service for those who need the program.
Florida is well underway in reshaping its Medicaid system with risk-adjusted managed care. Instead of serving as the provider of Medicaid services, the state is moving towards being merely the financer of these services. Medicaid recipients have a choice of managed care plans that are targeted to individual users’ needs. With this comes an incentive for managed care providers to find ways to control future growth of the program. Both Medicaid users and the state budget benefit.
Governor Strickland showed that he is not averse to trying new things with his proposal to use Medicaid funds to purchase private insurance. Florida’s Medicaid reform includes this, too. But the governor did not go far enough. Tacking this proposal onto his plan to expand Medicaid eligibility will do nothing to sustain the future growth of the program.
Allowing Medicaid funds to be used for private insurance is a good first step, but for it to truly be meaningful it needs to be coupled with a substantial overhaul of the program.
Instead of looking to simply move more people onto the current system, Ohio lawmakers should be looking for ways to better serve those already on Medicaid and limit the future growth of the program. The governor missed a golden opportunity to push for the kind of reform Ohio’s Medicaid program really needs.
Marc Kilmer is a policy analyst with the Buckeye Institute for Public Policy Solutions, a research and educational institute located in Columbus, Ohio.
