Seth Morgan: System is broken, and state can't afford it, anyhow
In his budget released last week, Gov. John Kasich announced his plan to expand Ohio’s Medicaid rolls as requested by the president’s health-care law. Adding hundreds of thousands of Ohio residents to Medicaid is the exact wrong policy for the Buckeye State.
Kasich’s desire to expand Medicaid is well intentioned but will do more harm than good. His policy ignores the realities of the Medicaid system.
Medicaid is a broken, costly system traditionally serving low-income populations focusing on pregnant women, children and the disabled. Under the text of the president’s health-care law, Medicaid would be expanded to cover all individuals below 138 percent of the federal poverty level —approximately $30,000 a year for a family of four — starting in 2014. If a state refuses to expand, it would lose access to all Medicaid funding; even for the services it currently delivers. Twenty-six states, including Ohio, challenged this provision as an unconstitutional abuse. The Supreme Court ruled 7-2 in June that the expansion could not be mandatory; the punishment was so severe as to represent no choice at all. Chief Justice John Roberts described the mandatory expansion as a “gun to the head” of states. Now, all states must decide how to proceed.
Medicaid’s unique structure — jointly managed by the state and the federal government — results in subpar outcomes for these covered families. All functional control of Medicaid is retained by Washington health-care bureaucrats, with states left to administer the system. States such as Ohio try to exert control over Medicaid but find any efforts stifled by Washington. Even simple reforms such as requiring address verification, as Illinois tried, are rejected.
As a result, Medicaid subjects doctors and hospitals to countless restrictions and paperwork requirements while paying below-market rates to providers. Medicaid pays providers half of what private insurance pays and well below rates for Medicare patients. As a result, 30 percent of doctors in Ohio don’t accept new Medicaid patients. Family physicians are seven times more likely to reject a new Medicaid patient than a new patient with private insurance.
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