One of the biggest issues facing state governments this year is whether to expand Medicaid to a large number of lower-income residents who currently do not have health insurance, which is more than 1.5 million Ohio residents. As part of the Affordable Health Care Act, the federal government has offered states a deal, one that Gov. John Kasich announced he plans to take. This expansion would provide coverage to people who are at 150 percent of poverty level or below, which equates to about 365,000 Ohioans. Currently, more than 1.5 million, or 14 percent, of Ohioans are uninsured.
We are pleased with Gov. Kasich’s decision. As a health system that focuses on the community it serves, we believe the expansion represents a crucial step in creating a healthier community and building a better health-care system for Ohioans. It would cover people who have fallen through the cracks in the past in regard to health-care coverage. They don’t have a job that offers insurance or enough income to purchase it on their own, but they make just enough to disqualify themselves from coverage.
Between charity care and bad debt, Lima Memorial spends about $11.3 million each year. Medicaid expansion is not a solution to the nation’s health-care problems, but it’s a step in the right direction.
If states chose to expand Medicaid, the federal government will pay the entire cost of the expansion for three years, dropping to 95 percent in 2017 and finally dropping to 90 percent after 2019. A study released by the Health Policy Institute of Ohio, Ohio State University, the Urban Institute and the Partnership of Regional Economic Models Inc. estimates that Ohio would gain $104 million in 2014 and $1.4 billion by 2022 by taking advantage of expansion.
Kasich also said that Ohio would “reverse this decision” if the federal government failed to cover its end of expansion costs as originally stated. Attention now turns to the House Finance committee where focus will be on the sustainability of the expansion, along with access issues and the future of the expansion after 2017.
The Ohio Hospital Association announced its support of Kasich’s decision. However, it is concerned about the variety of reimbursement cuts to hospitals included in the budget such as cuts to basic Medicaid payments funded by hospital franchise fee revenue, cuts to Medicaid payments for certain procedures and services, as well as potentially devastating cuts designed to penalize hospitals for re-admissions, including medically necessary re-admissions.
These cuts are proposed in addition to the cuts to hospital payments enacted by SFY 2012- 2013 state budget legislation, which will have the impact of reducing Medicaid payments for hospital services by an additional $500 million over the upcoming biennium.
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