Ohio makes its move on Medicaid

Last week, Ohio Governor John Kasich committed to the state’s Medicaid expansion with the caveat that the state can back out if the federal government fails to produce the funding it promised through the Patient Protection and Affordable Care Act (PPACA). What’s significant about Ohio’s policy is that Kasich, a Republican, has long criticized the law and has already determined that Ohio will not operate its own insurance exchange.

Likewise last week, Michigan’s Republican Governor Rick Snyder also said his state would expand Medicaid, despite resistance from the state legislature. The number of Republican states opting in to the expansion now number six.

According to the Health Policy Institute of Ohio, by expanding Medicaid, Ohio will net $709 million in savings through 2022 because of the higher federal match. It will also gain $1.8 billion in revenue in that time frame from taxes associated with managed care enrollment. General revenue increases and drug rebates will be an additional offset to increased program costs for Ohio.

In a separate healthcare conference in Washington, Health and Human Services Secretary Kathleen Sebelius reinforced the federal government’s promise to fund the Medicaid expansion for states. Federal Medicaid dollars will reach $1 billion in 2014, climbing to $5 billion by 2022, according to the institute.

Currently, Medicaid eligibility in Ohio is limited to 90% of federal poverty level for custodial parents. Low-income adults without children do not qualify at all. The expansion will increase access to coverage for both of these populations, allowing them to qualify at an income level of 138% of federal poverty level.

Ohio could add 366,000 uninsured residents to Medicaid rolls and Michigan could add 470,000.