Medicaid expansion adds up for Ohio families, taxpayers: Evelyn Lundberg Stratton
Byon March 16, 2013
As a former Ohio Supreme Court justice busily and happily transitioning into my new work on mental health and veterans' issues, I wasn't paying much attention to the discussion about Medicaid expansion. Like Gov. John Kasich and many others, I had issues with Obamacare. Then a friend asked me to "look at the facts" of Medicaid expansion. That triggered 23 years of judicial training, learning how to put aside personal biases and feeling and judge a matter on evidence alone.
This is what I learned:
Medicaid is health insurance for Ohio's most vulnerable citizens -- those earning up to 138 percent of the federal poverty level, or about $15,856 for an individual and $32,499 for a family of four. About 366,000 Ohioans will be covered by the Medicaid expansion for an estimated total cost of $2.6 billion over the biennium.
That cost will be paid entirely by the federal government through 2016, ratcheting down to 90 percent afterward. Ohio can opt out of the expansion if the rules change later.
Rejecting the federal expansion money would send federal money back to Washington and to other states to pay for their Medicaid expansions. Yet Ohio receives billions of dollars every year from the federal government for roads and bridges, education and research grants, and we don't for one minute consider sending that money back to the federal government. After all, we pay good money to the federal government in the form of taxes, and we deserve to get some of it back. How is Medicaid expansion any different?
Besides, state and local governments, employers and taxpayers already pay for the health care of uninsured Ohioans. Our Department of Rehabilitation and Corrections will save $27 million over the biennium on inpatient hospital costs to prisoners under the expansion. In addition, the community behavioral health system will save approximately $105 million over the biennium on services that shift to Medicaid. For example, of the 8,000 individuals in Lucas County now requiring behavioral health services, 7,000 -- or 88 percent -- would be covered by Medicaid, saving $4.6 million and freeing up much-needed local funding for other county needs.
Today, health care for 1.5 million uninsured Ohioans is borne by Ohio's hospitals, employers and 10 million other taxpayers. Hospitals are required to provide medically necessary care, at no cost, to low-income and uninsured individuals. Hospitals make up their losses by charging others more or eliminating services or programs. As a result, the average privately insured individual pays approximately $1,000 per year for costs incurred by uninsured individuals.
Preventive health care for uninsured individuals is virtually nonexistent. They often wait to seek medical treatment -- hoping the condition resolves itself -- until their situation worsens, requiring care in the emergency department. This is a costly scenario for both the individual and the hospital. In 2010, Ohio hospitals provided $1.1 billion in total charity care and incurred $645 million in bad debt.
The Affordable Care Act reduced reimbursement to hospitals that provide a high volume of care to low-income and uninsured individuals with the expectation that the additional Medicaid funds associated with the expansion would offset the loss. The U.S. Supreme Court ruled that the Medicaid expansion is optional for states, but if a state rejects it, its hospitals will still feel the impact of the reimbursement cuts.
My analysis: Why would we turn down these federal funds and instead use local dollars to pay for needs that already exist? Our federal income-tax dollars will go to other states and we still have to come up with the local dollars.
I have used my health insurance many times, including for surgery that I otherwise would never have been able to afford. But so many people have no such insurance. I am particularly concerned about those with serious mental illnesses. I saw many of them in my courtroom, and I know firsthand the ill effects of a lack of insurance and a poorly funded community behavioral health system.
Individuals who do not get needed physical and behavioral health treatment and their families struggle. Extending Medicaid to Ohio's lowest-income uninsured is the right thing to do for them and for all Ohioans.
Evelyn Lundberg Stratton, a former Ohio Supreme Court justice, is a health care adviser and attorney with Vorys, Sater, Seymour and Pease LLP.