Ohio’s Budget Should Not be Left to Burn While Washington Fiddles with Healthcare Reform

Greg R. Lawson Oct 11, 2017

Ohio policymakers should not join those in Washington DC in acting like a modern day Nero who, at least according to myth, fiddled while Rome burned.

The expansion of Medicaid, to largely able-bodied adults, has clearly cost vastly more than what state leaders initially envisioned. As Medicaid spending, the Pac-Man of the state budget, continues consuming state resources, U.S. Senator Ron Johnson (R- WI) is demanding answers from the Kasich Administration on why the costs of Medicaid have blown up!

While finding a way to insure more Ohioans is an important policy discussion, the increase in Medicaid spending is impacting Ohio’s ability to fund other priorities such as K-12 education, caring for Ohio’s aging population, the construction of roads and infrastructure, an effective rehabilitation and correction system, and so much more.

This is one reason why Congress’ failure to repeal and replace Obamacare is such a disappointment. Congress’ lack of action is impeding Ohio’s ability to reform its own Medicaid system, and if not reformed dramatically, will eventually not only be like Pac-Man, it will be like the fire that consumed all of Rome, leaving nothing for those worried about our future economic competitiveness or, most importantly, our children.

However, while members of Congress fiddle away on health care reform, Ohio policymakers can do something to avoid this financial train wreck – freeze the expansion!

As our executive vice president, Rea Hederman, said of the budget prior to Governor Kasich’s unfortunate line item veto:

“Ohio became the first state in the nation to call for a freeze on the Medicaid expansion population, which will focus the program on the truly needy and encourage able-bodied adults to return to work. Medicaid enrollment has exceeded forecasts on both enrollment and costs, and this budget will help make the program sustainable for the future.”

Unfortunately, the General Assembly has so far failed to act on Governor Kasich’s veto of the expansion freeze, which they can vote to override any time until the end of the legislative session in December of 2018.

According to recent news reports, State Representative Rob McColley (R-Napoleon) circulated a memorandum to fellow members of the Ohio House of Representatives highlighting numerous reasons for freezing the Medicaid expansion. Contrary to headlines that say the facts in the memorandum were “dubious,” it is spot on.

Pushback from the Kasich Administration, and many of the healthcare providers, that stand to continue gaining billions from continuation of this policy, is deeply flawed. For example, the administration tries to refute the argument that spending on Medicaid is not out of control by asserting that Medicaid has come in under budget.

What the administration doesn’t tell us is that Medicaid costs are clearly much higher than initially projected because the administration only expected 447,000 enrollees by 2020! By contrast, the latest actual enrollment numbers from the Ohio Department of Medicaid stands at 708,000, or 58 percent over what Ohioans were told during the initial debate over expansion.

Further, the McColley memo makes clear that the enhanced federal share for the Medicaid expansion was subject to change. That is still true, just as The Buckeye Institute said long before the expansion took place. While it is still difficult to ascertain when the federal government will turn off the spigot, that it will happen is practically guaranteed. Further, the notion that Ohio will, under those circumstances, simply jump out of Medicaid expansion as described by the governor seems fanciful.

Consequently, none of the pushback from the administration should dissuade forward thinking legislators from stepping up the plate – something they already did when passing the budget at the end of June. While Medicaid waivers and other reforms are needed in addition to an expansion freeze, it is better to make a tough decision today than draconian one tomorrow.

We cannot afford to be like Nero and fiddle while Medicaid burns through Ohio’s budget and destroys the ability to do anything besides pay for Medicaid. This is not a long-term path on which Ohio should remain. Tragically, it is the path on which we presently, and perilously, tread.

Greg R. Lawson is the research fellow at The Buckeye Institute.