Ending Medicaid expansion would devastate Ohio’s economy

(Ohio Capital Journal) — Earlier this month, the Ohio House passed its version of the biennial budget, setting priorities for the state with tens of billions of dollars of spending.

The House version of the budget had many significant changes from the governor's original budget. The House axed tax hikes on cannabis, gaming, and tobacco, the latter of which could have saved tens of thousands of lives by reducing smoking rates in the state. They also cut the state library fund by $90 million, child care subsidies by $180 million, and removed a child tax credit for families with young children that could have directly supported half a million children and grown the economy.

One provision the House preserved from the executive budget, however, was a law that would immediately revoke health insurance for 770,000 Ohioans if the federal government reduced its contribution to Medicaid at the state level.

When the Affordable Care Act was passed in 2010, the Obama Administration and Democrats in Congress had a goal to ensure everyone in the United States had access to affordable health insurance. The Affordable Care Act did this in a number of ways: covering children with their parents' health insurance until age 26, creating subsidies for lower- and middle-class families to purchase individual insurance, requiring employers to provide health insurance to full-time workers, prohibiting denials of coverage due to preexisting conditions.

One of the biggest elements of this strategy was expanding Medicaid coverage to all Americans with incomes under 138% of the federal poverty level, with the federal government paying 90% of the health costs for this new "Medicaid Expansion" population. This provision was challenged in courts and the Supreme Court ultimately made this optional for states. To date, 40 states have accepted the federal dollars to provide health insurance to low-income residents, including Ohio.

Today, 94% of Ohio residents are covered by health insurance, one of the state's strongest health metrics. According to the Ohio Department of Medicaid, 770,000 Ohio residents are covered by Medicaid Expansion, about 6.5% of the state population. If these people lost their health insurance immediately, the number of people without health insurance in the state would double in an instant.

That is exactly what the Medicaid provision introduced by the governor and as passed by the House will do if the federal government reduces its share of the Medicaid expansion support by as little as a dollar. Ohio is likely to join twelve other states by adopting language that would automatically cut the Medicaid expansion population from health insurance rolls if the federal government reduces its match rate.

If this happened in Ohio, 770,000 Ohio residents would automatically lose health insurance. This would also have ripple effects through the state economy. The Kaiser Family Foundation estimates this would lead to a $72 billion reduction in federal Medicaid spending over the next ten years. That's about $7.2 billion a year in health care spending that would evaporate from the state, roughly equal to 30% of Ohio's economic growth over the past year, gone overnight.

These costs would compound over time. People without health insurance are less likely to get preventative screenings, leading them to more frequent emergency room use and more costly treatments. Evidence shows Medicaid expansion improved financial security, promoted tobacco cessation, and reduced rates of heart disease and premature death.

Medicaid is not cheap. But the evidence we have on it suggests it pays dividends to society. Legislators should think hard about the consequences of kicking 770,000 Ohio residents back into the ranks of the uninsured.