Columbus Dispatch...
Medicaid estimate grows by $365M
State says several factors raised 2014-15 cost expectations 63% 

Gov. John Kasich says he doesn’t know if the state can afford adding more poor, uninsured Ohioans to Medicaid rolls as called for in President Barack Obama’s health-care law. 

Even if Ohio opts out of expanding Medicaid, as the U.S. Supreme Court ruled last month states could do, the Kasich administration projects nearly 400,000 Ohioans already eligible will sign up, costing taxpayers $940 million in 2014 and 2015. 

That price tag cited by Kasich, a staunch opponent of Obama’s health-care law, is 63 percent ($365 million) higher than projections his administration produced a little more than a year ago. 

The higher cost estimate, released shortly after the high court upheld most of the health-care law, comes as partisan debate over Democrat Obama’s key domestic-policy achievement intensifies leading up to the November presidential election.So is the lofty price tag legitimate? Or did the Kasich administration cook the books because it condemns “Obamacare”?The administration said the higher cost was fueled by updated data, not politics, and an adjusted timeframe that added three months of costs to earlier estimates for Medicaid, the health-care program for the poor and disabled. 

Greg Moody, director of the Governor’s Office of Health Transformation, said state Medicaid staff workers came up with the projections based on information from two actuaries and leaned toward a more-conservative forecast. 

A new report by the Center for Budget Policies and Solutions, a left-leaning research group in Washington, D.C., found critics of the health-care law have inflated the costs some states will face. 

“It’s true that we expect a bunch of already-eligible people to sign up and states don’t get (100 percent) of those costs covered, but these folks are already eligible,” said Judy Solomon, one of the report’s editors.While the study did not look specifically at Ohio’s projections, estimates in other states, including Florida, Indiana and Mississippi, “seem to be overstating their cost,” she said. 

In general, the states overestimated how many people will enroll in Medicaid, the number of working poor with employer-sponsored coverage who will drop private coverage to go on Medicaid, and the cost of newly enrolled recipients. 

Like several Republican governors, Kasich questions but has not ruled out expanding Medicaid, a critical part of the health-care law that aims to cover 17 million more low-income Americans, including about 1 m illion in Ohio. The Supreme Court gave states the power to opt out, ruling that the federal government cannot force them to expand their programs. 

Under the law, the federal government will pay all expansion costs for the first three years and more than 90 percent in subsequent years. 

But the law is also expected to spur the uninsured who are eligible for Medicaid to sign up. That would enable them to comply with the requirement beginning in 2014 that most Americans have health insurance or pay a fine. 

Administration officials say Ohio must first figure out how to cover those costs before deciding whether to expand eligibility, bringing even more people into the program. The latest cost and enrollment projections, they say, are based on the most up-to-date information available, and several factors are driving up expenses. 

“This is our best estimate based on different assumptions,” said Eric Poklar, spokesman for the Office of Health Transformation. 

Poklar said the added $365 million over last year’s projection for 2014-2015 stems from three factors: 

• A 33 percent increase over last year’s projection in the number of Ohioans currently eligible for Medicaid who are expected to enroll once the individual health-insurance mandate begins. 

• A 1 percent drop in the federal share for covering current Medicaid participants, requiring the state to cover more of the cost. 

• An accounting change that added three months of higher costs to the latest projection. 

The last, Poklar said, accounts for roughly half of the added cost. The latest projection estimated costs from Jan. 1, 2014, through Dec. 30, 2015, starting the same day the new law’s key provisions will go into effect. Earlier estimates followed federal fiscal years, beginning Oct. 1, 2013, so three months of less-expensive coverage — before the law starts — were included. 

As a result, in the new estimate, the health-care law will be in effect for all 24 months, compared with 21 months of last year’s projection. 

Poklar said state officials changed the time frame in a recent request to federal regulators to streamline the application process. That request stemmed from groundwork to launch a state exchange where Ohioans could compare and shop for insurance, but the Kasich administration has since decided against setting up an Ohio exchange. 

As for enrollment, state officials estimated that 320,000 Ohioans will enroll in 2014 with another 72,500 coming into the program in 2015. That’s a 33 percent jump from last year’s projection of 291,000 in 2014 and 4,500 more in 2015. 

Finally, state officials projected Ohio’s costs will increase in 2014 and 2015 because annual adjustments to the cost-sharing formula will result in a smaller federal contribution, shifting more cost to the state. The federal share is expected to drop from 64 percent to 63 percent, according to projections provided to the state by the National Governor’s Association and National Council of State Legislatures. 

Amy Rohling McGee, president of the Ohio Health Policy Institute, said with that many variables, it’s easy for different forecasters to come up with wildly different calculations. 

A 2010 analysis by the Kaiser Commission on Medicaid and the Uninsured, for example, estimated Ohio’s cost for those currently eligible for Medicaid would be $585 million for five years, 2014-2019, a fraction of what state officials now estimates for only two years. 

“You need to use the latest numbers and hope they are right,” McGee said. “I think they’ve done the best job they can with the information they have, but we just don’t know.” 

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