Huge bill from Medicaid feared

April 25--Enrollment in Medicaid under Ohio's expanded eligibility requirements is growing much faster than expected, raising concerns about cost overruns that might impact taxpayers in the coming years when the state would be required to fund up to 10 percent of the cost of expansion.

As of March, the number of Ohioans enrolled in expanded Medicaid was 527,821 -- 156,967 above estimates, according to figures from the Ohio Department of Medicaid.

If the trend continues, some estimates predict the cost of the program could run more than $1 billion over the nearly $2.6 billion in federal funds that the state controlling board requested to expand Medicaid last year at the behest of Gov. John Kasich.

While the government has promised to cover the full cost of expansion through 2016 under the auspices of the Affordable Care Act, federal support starts to ratchet down in the second half of 2017. Ohio would be initially responsible for 5 percent of the cost, with the state's share climbing to 10 percent in 2020.

As enrollment grows in the state and federally funded health insurance program for the poor and disabled, so too will the tax burden on Ohioans, said Greg Lawson, an analyst at conservative-leaning Buckeye Institute for Public Policy Solutions.

"At the end of the day, as long as we have more people on the Medicaid rolls than were initially expected there's going to be an expense to the state taxpayer, and it's going to continue to grow," Lawson said.

He argues that the swelling ranks of newly covered Medicaid recipients will not only create a new tax burden for Ohioans but also shift tax dollars from other public programs, such as education.

'We expected to see a rush'

Medicaid expansion for the first time provided coverage to most able-bodied, working-age adults earning below 138 percent of the federal poverty level.

Ohio officials are quick to point out that while the expansion has exceeded projections, enrollment won't necessarily continue to grow at an accelerated pace.

In fact, expansion enrollment actually declined last month for the first time, edging down from 530,412 at the end of February, according to Sam Rossi, a spokesman for Ohio Medicaid

"We expected to see a rush early on once people who had nowhere else to go were finally eligible for Medicaid," Rossi said. "But even with the expansion population...we are under our overall spending for the year."

Rossi said the growth of the expansion group was more than offset by a decline in traditional enrollment, which brought Ohio's full Medicaid enrollment at the end of March to 2,991,368 -- 26,740 below estimates.

Total spending on Medicaid in the current fiscal year is $330 million below forecasts, including the state's share of $224 million, he said.

Much of the savings can be attributed to the state's overestimate of the number of Ohioans who were already eligible for Medicaid before expansion was adopted. They were expected to "come out of the woodwork" and sign up for Medicaid coverage as a result of the health care law's individual mandate, which requires most people to obtain insurance coverage or pay a tax penalty.

The so-called woodwork population is covered by traditional Medicaid, which requires the state to spend about 37 cents on the dollar to provide coverage.

But woodwork enrollment "has been well below projections," Rossi said.

Projected Medicaid bill: $7.4B

Rep. Jim Butler, R-Oakwood, who recently introduced health reform House Bill 157, said even if the Medicaid expansion population stabilizes, expansion will still add more people to a system in which costs are already spiraling out of control.

According to Butler, state tax dollars spent on Medicaid will climb by 57 percent from $4.7 billion in 2011 to a projected $7.4 billion in 2017 -- growth that's simply unsustainable without sacrificing spending in other areas.

"We have a problem now without the expansion population added into Medicaid," Butler said. "So adding to that without substantial reforms in the Medicaid system and health care system overall would be imprudent."

Although the federal government has promised to pick up the lion's share of expansion costs, there are no guarantees the state won't eventually find itself on the hook for a larger share, according to Butler.

Advocates scoff at such doomsday predictions.

"It's just not just not warranted by the history of the program,'' said Wendy Patton, a senior project director for Policy Matters Ohio. "When has the federal government ever gone back on a promise of maintaining its share of the cost of providing health care? Never. So I don't understand why (state legislators) believe there's a higher likelihood now.''

Critics of Medicaid expansion also tend to ignore the economic stimulus of federal dollars flooding into state coffers, as well as the cost savings from providing of tens of thousands uninsured Ohioans with health coverage who would otherwise continue to receive care from public clinics and hospitals that are subsidized by state dollars, Patton said.

"The billions of federal dollars coming in now and in the future for the expansion population are allowing hospitals to expand services and hire more people," she said. "It's stimulating the economy. Counties are seeing more sales tax revenue. There is a dramatic economic benefit from expansion on one of the most important employment sectors in our economy, the health economy, and that's good for Ohio.''

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