John Kasich’s Medicaid Lecture
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Ohio’s Governor doesn’t preach what he practices at home.
Few politicians have acquitted themselves well in the health-care debate, but no one has dumped his former principles harder than John Kasich. Ohio’s Republican Governor has emerged as the media’s go-to source for substance-free lectures opposing Medicaid reform, and this debate could use a fact or two, not least about Ohio.
“If you cut $750 billion out of Medicaid, and in the out-years you basically starve the program, we have to choose between children, seniors, the disabled, the addicted, the mentally ill,” Mr. Kasich told ABC’s Martha Raddatz last weekend. He added, repeatedly, that the GOP has refused to “put the country first.”
Presumably this accusation of being unpatriotic extends to the Republicans who control the Ohio state legislature, who recently voted 59-40 in the House and 24-8 in the Senate to freeze Medicaid enrollment after 2018 amid exploding costs. The freeze applies only to the Medicaid expansion population—able-bodied, childless adults earning up to 138% of the federal poverty level.
This cost-control measure was necessary because enrollment in new Medicaid has reached 725,000, well above the Kasich Administration’s prediction of 447,000 when the Governor bypassed the legislature and unilaterally expanded Medicaid under ObamaCare in 2013. One of four Ohioans is now on the program. Mr. Kasich line-item-vetoed the legislature’s freeze, invoking drug abusers. Though the freeze explicitly exempted people in need of mental health or addiction treatment, the legislature failed to override the veto on Thursday.
The irony is that the Medicaid expansion diverts resources from the program’s traditional targets. The federal government pays an original “match rate” of 62.8% in Ohio but pays 96% for new ObamaCare Medicaid beneficiaries. This means that adults not in poverty are worth more to the state than, say, the developmentally and intellectually disabled.
Sure enough, in 2015 Ohio redesigned its disability determination system to remove some 34,000 people from the safety-net rolls. Nearly 60,000 disabled Ohioans are on waiting lists that last for months or years to receive supplemental state services. A temporary enrollment freeze might lead Ohio to prioritize resources for the truly needy.
Despite this history, Mr. Kasich ran for President in 2016 as a fiscal conservative. On the campaign trail the man who chaired the House Budget Committee in the 1990s lugged a large electronic debt clock that showed what U.S. taxpayers owe to every town hall.
On Medicaid Mr. Kasich said “per-member per-month allocations to the states, along with the flexibility to innovate and tailor their programs to their individual health care markets, can help hold Medicaid’s spending growth to 3 percent annually.”
That is precisely what the Senate bill does—except it is more generous. While ending Medicaid’s status as an open-ended entitlement, its block-grant replacement grows at 3.7% over the next decade, or the rate of medical inflation, on a per-member per-month (PMPM) basis. It shifts to the regular consumer price index (2.4% today) in 2026, which some Senators and apparently Mr. Kasich believe is too miserly.
Yet Ohio PMPM spending grew at 1.2% for 2016 and 2.6% so far for 2017. Mr. Kasich’s Office of Health Transformation projects PMPM Medicaid growth rates of 1.9% in 2018 and 1.5% for 2019. The notion that Ohio can’t manage under the Senate bill’s caps is purely political, or to be more precise, politically cynical.
If Mr. Kasich wanted to be constructive, his own reforms show how states can improve Medicaid. The decision to join new Medicaid was extremely costly, but the state has shifted spending from nursing homes and toward more efficient home- and community-based services. From 2009 to 2011 Ohio Medicaid PMPM spending was growing at 8.9% annually. Now the average is 1.72%.
By the way, the GOP Senate bill is likely to include $45 billion to combat opioid abuse, which Mr. Kasich says is “like spitting in the ocean.” This new money would come on top of the Comprehensive Addiction and Recovery Act of 2016, which this year will increase opioid spending by 542% at Health and Human Services and 113% at the Justice Department. This is like adding an ocean to another ocean.
A few GOP Senators are sore that we wrote the other day that “some Republicans” seem to want “to ratify ObamaCare’s Medicaid expansion as an unrepealable and unreformable welfare program.” If Mr. Kasich doesn’t qualify as a ringleader for this crowd, maybe that’s because he’s getting harder and harder to identify as a Republican.
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