Mon January 21, 2013
State officals doubt Medicaid expansion will bring bonus
A new report says Medicaid expansion could bring Ohio nearly one and a half billion dollars over the next ten years. But Ohio Public Radio's Karen Kasler reports, state officials are not convinced about the costs involved.
State officials haven’t yet decided whether to expand Medicaid under the Affordable Care Act. But budget director Tim Keen is concerned about the so-called “woodwork effect”, where people who are eligible for Medicaid but haven’t signed up do so in droves – and their costs won’t be covered by the new health care law.
“These will be borne in the traditional sharing method where the state has to pay about a third of those costs.”
Kasler: “So the state has to absorb those costs – “
Keen: “We do.”
Kasler: “ – and will maybe have to shift funding from other areas?”
Keen: “Well, clearly, again, this – the answer’s yes. We will have to absorb these costs. And that means there’s that much less money that is available for us to apply to other areas, including some of the tax cuts that the Governor wants to put into this budget.”
But Cathy Levine with Ohio Consumers for Health Coverage says she calls it the “welcome mat effect” and says it’s going to happen anyway – but that if the state expands Medicaid, that will bring in new revenues to help with the costs.
“What the study demonstrates is that the money coming in for the newly eligible will generate new revenues from provider taxes, sales taxes, incomes taxes – so much revenue will come into the state that it will help the state pay for the woodwork effect. If I were the state budget and were worried about the woodwork effect, I would support the Medicaid expansion as the best way to pay for the woodwork effect that will happen whether or not we do the Medicaid expansion.”
The study estimates that Medicaid expansion in Ohio would pay for itself by 2022, but the federal government’s share will eventually drop and the state would basically break even. Several groups have come out in favor of Medicaid expansion, including the Ohio State Medical Association and the Columbus Chamber of Commerce.