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Forget politics and ideology, Medicaid expansion is just bad policy

Joe Nichols Oct 23, 2014

Ohio Governor John Kasich made national news with an Associated Press interview concerning Obamacare and Medicaid expansion.

“The opposition to it was really either political or ideological,” Kasich told the AP of Medicaid expansion. “I don’t think that holds water against real flesh and blood, and real improvements in people’s lives.”

We plead guilty to opposing the Affordable Care Act and Medicaid expansion, but on purely policy grounds. Doctors provide better care in a market-based system than a system controlled by the federal government. Medicaid remains a poor way to expand health care to low-income people.

The Buckeye Institute has repeatedly argued that Medicaid expansion is bad policy for Ohio. It places unsustainable financial liabilities on future taxpayers. It will provide an additional burden to a labor market that has already been reeling in Ohio, doing long-term damage to the economy and compounding the expansion’s direct impacts to the state budget. We have also pointed out that this economic sacrifice is for a program that has not proven to be able to obtain significantly better health outcomes for most recipients and fails to provide a real saving grace to the most vulnerable.

In the same interview, Kasich said, “I have favored expanding Medicaid, but I don’t really see expanding Medicaid as really connected to Obamacare.”

But in fact, the two are inextricably linked. According to the Washington Post, “If every state opted into the program, it would account for about half of the expected coverage gains under the law.” The Heritage Foundation finds that so far, 71 percent of the 8.5 million individuals who gained coverage did so via Medicaid expansion.

Further, Ohio is unlikely to have considered expanding Medicaid in absence of Obamacare and its dubious promises of federal grants to fund it, at least for the time being. The CBO estimates the total cost of the ACA coverage provisions at $80 billion in 2015 alone, of which $29.5 billion or 37 percent is Medicaid. Approximately 43 percent of the added $1.8 trillion projected cost of the ACA to the federal government from 2015-2024 is due to Medicaid and CHIP.

A legislative decision to reauthorize the use of federal money to pay for Medicaid expansion will need to be reached next year, presumably during the biennial budget negotiations. Ohioans should urge their legislators to shun politics and ideology and instead consider whether this is really the best policy for our future.