Wednesday, October 21, 2015

Ohio’s Obamacare expansion has cost taxpayers $5 billion

Posted by Jason Hart @ Ohio Watchdog / October 20, 2015 / No Comments

Photo credit: State of Ohio

September brought another milestone for Ohio Gov. John Kasich’s Obamacare expansion, and a heavier millstone for taxpayers stuck bearing the costs.

Kasich’s decision to put working-age Ohioans with no kids and no disabilities on Medicaid has cost federal taxpayers more than $5 billion in less than two years.

The Ohio Department of Medicaid reported spending $394 million on Obamacare expansion in September. Ohio’s Obamacare expansion has cost more than $300 million every month since December and more than $370 million every month since July.

After just 21 months of enrollment, Obamacare expansion costs dwarf state spending on programs long recognized as the state government’s basic responsibilities.

By contrast, Kasich’s Office of Budget and Management reported spending $133 million on justice and public protection and $206 million on primary and secondary education in September.

Even when non-General Revenue Fund spending on Obamacare expansion is excluded for the sake of an apples-to-apples comparison, Ohio spent nearly as much on Obamacare expansion as on public safety and K-12 education combined.


Kasich, a Republican, expanded Medicaid to bring new Obamacare funding to the state. The expansion has been rocketing past cost projections since taking effect in January 2014.

Blocked by the Ohio General Assembly, Kasich went to the obscure Ohio Controlling Board for permission to spend $2.56 billion in Obamacare money for the expansion’s first 18 months; in 14 months, that money had been spent.

By June, Kasich’s Obamacare expansion had cost taxpayers more than $4 billion. By September, the cumulative cost of Obamacare expansion benefits in Ohio was $5.2 billion.

On the presidential campaign trail, Kasich boasts of building Ohio’s rainy day fund to $2 billion in four years; at home in Ohio, his Obamacare expansion cost more than $2 billion in the past six months.

Obamacare expansion funding — which Kasich describes as “Ohio’s tax dollars” he is “bringing back” to the state — is 100 percent new federal spending until the end of 2016, providing a boost to the state budget on the shoulders of federal taxpayers.

If spending continues at its current rate, taxpayers will be on the hook for more than $4 billion in Ohio Obamacare expansion costs every year. Ohioans will have to pay a state share starting at 5 percent in 2017 — increasing to 10 percent by 2020.

Free-market think tank Opportunity Ohio recently published a study estimating the state’s future Obamacare expansion costs under a variety of scenarios, taking into account the possibility of federal funding cuts below the promised 90 percent.

Opportunity Ohio projects Medicaid expansion will cost Ohio taxpayers $5.3 billion from 2019-26 with no changes to Obamacare, or as much as $19.9 billion if Congress cuts the federal share so expansion is funded at the same rate as traditional Medicaid.

With or without further changes to Obamacare, the law’s Medicaid expansion appears certain to cost Ohioans more than advertised by the Kasich administration.

“There’s no question that state taxpayers are going to be on the hook for more than we were told initially,” Greg Lawson, a policy analyst for the free-market Buckeye Institute, told Ohio Watchdog.

Lawson said it’s likely the state will cut Medicaid benefits for pregnant women, poor families, the elderly and the disabled to help pay for the cost of putting working-age adults with no kids and no disabilities onto the welfare program.

In his most recent budget, Kasich proposed cutting Medicaid eligibility for pregnant women and women with breast or cervical cancer from 200 percent of poverty to 138 percent of poverty. The General Assembly blocked the proposal.

“We have to be very careful that we’re not robbing Peter to pay Paul,” Lawson said. “In this case, robbing the Peter who everybody supports being on Medicaid to pay for the Paul who a lot of people think doesn’t need to be on Medicaid.

Lawson said meaningful reforms to Medicaid require flexibility President Obama’s administration has refused to give. That’s one reason the Buckeye Institute advised against Obamacare expansion.

The governor’s office failed to respond to questions about Ohio’s Obamacare expansion costs.

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