Think of it as unlocking the value of Medicaid: 450,000 more Ohioans with health insurance, representing a net revenue gain of about $1.4 billion to the state over eight years. The only way to lose is for Gov. John Kasich to say no to expanding Medicaid coverage under Obamacare.
Ohio’s Medicaid program covers adults with children, whose household income is 90 percent or less of the federal poverty level; it does not insure childless adults. According to the Health Policy Institute of Ohio, a nonpartisan think tank in Columbus, it would cost Ohio nearly $2.5 billion to expand Medicaid coverage by 2022 to include all adults with incomes up to 138 percent of the poverty level — about $32,000 a year for a family of four.
Under the Affordable Care Act, the federal government would pay the entire cost of Medicaid coverage for newly eligible adults for three years. The federal share would then drop gradually, leveling off at 90 percent in 2020.
Many of the federal tax dollars that will subsidize Medicaid expansion were collected in Ohio. But they will go to other states if Ohio doesn’t want them.
The report by the Health Policy Institute, working with the Urban Institute and Ohio State University, doesn’t take a position on whether Ohio should expand its Medicaid program. But it notes that the benefits would outweigh the costs for at least the next eight years.
According to the analysis, Ohio would save $709 million over the same period, because the federal government would pick up more of the cost for adults who now qualify for Medicaid only after medical bills have drained their resources.
Ohio taxpayers also would save an estimated $48 million on coverage of women who qualify for Medicaid after breast-cancer diagnoses. Other projected savings include $273 million on inmate care, and $389 million on mental health treatment for previously uninsured Ohioans.
State and local revenue also would increase, the report says. More than $1.8 billion more could be collected in state sales tax and insurance tax if Medicaid is expanded. That additional state revenue would generate increased economic activity, which could add $857 million to state coffers. And the state would gain $218 million in increased prescription drug rebates from manufacturers.
Local governments will benefit as well. Counties could collect as much as $387 more in sales taxes by 2022. They also will save money they now spend on care for poor and uninsured residents.
The Urban Institute estimates that Ohio could realize a net gain of more than $1.4 billion over the next nine years from Medicaid expansion. Nearly 32,000 jobs would be created. Earnings by Ohio workers would increase by $17.5 billion.
After eight years, the report says, costs will begin to surpass savings and increased revenue. But Medicaid is going to expand in any event.
People who qualify for the program but have not enrolled are expected to do so rather than face penalties for not having insurance. They will cost Ohio 37 cents for every Medicaid dollar they spend. And Ohio still will have to figure out how to deal with rising health-care costs.
But Medicaid expansion would give Ohio eight years to address rising medical costs. In the meantime, according to the liberal advocacy group Innovation Ohio, expansion would save an estimated 3,400 lives of Ohioans each year.
More Ohioans with health insurance, better health outcomes for the state’s neediest residents, and more time to rein in medical costs. To quote Governor Kasich on a different topic: “Why didn’t somebody do this about 25 years ago?” Nobody did, but he can when he unveils his budget next month.
Mr. Kasich’s skeptical political side asks whether Washington will keep its promise to pay for expanding Medicaid in Ohio. But his pragmatic business side should not pass up billions of federal dollars and a healthier Ohio.