• How the tea party is misleading about Medicaid expansion

    by  • May 5, 2013 • Uncategorized • 16 Comments

    We have agreed in the past with the tea party on most issues and still do on many. However, lately they could easily be mistaken for an arm of the Ohio Democratic Party, because they have all but declared Governor Kasich their worst political enemy.

    The subject of most of their ire is the decision to expand Medicaid in Ohio. Expanding a federal entitlement program is never something a conservative wants to support, and I’m not here to defend it. We strongly oppose Obamacare and so does the Kasich administration.

    But what I will do is show you that as long as Obamacare is the law of the land, the decision by states whether or not to expand Medicaid is actually not as consequential as it sounds. What follows is why.

    Obamacare provides health coverage to currently uninsured people up to 400% of the federal poverty level. Most people below 100% already qualified for Medicaid as it previously existed. The way the law was originally written, Obamacare expanded Medicaid to include people up to 138% of poverty, and then would help pay for policies on the Obamacare exchange for others up to 400% of the FPL.

    The Supreme Court upheld most of Obamacare but ruled that states could opt out of Medicaid expansion if they chose to. But here’s what you aren’t hearing from opponents of expansion: if states reject Medicaid expansion, the federal government will still buy insurance for people between 100% and 138% of poverty.

    So let’s look at the costs.

    According to the Kaiser Family Foundation, the average Medicaid spending for adults in Ohio is $3315 per year.
    So, the federal government will pay about $3315 per new enrollee between 100% and 138% of poverty, who didn’t previously qualify. The state expects that number to be around 275,000 people. (The vast majority of newly eligible people will be adults, because children and the disabled over 100% are already eligible and “aged” people qualify for Medicare.)

    That’s about $1 billion in additional federal spending, and it is a LOT of money. If that’s all there was to it, it would be as easy choice to say no to expanding Medicaid, because it means you would avoid billions in extra federal government spending. But that’s not the case.

    Here’s what the tea party never tells you in their attacks on John Kasich:

    If states reject the expansion of Medicaid to people between 100% and 138% of the FPL, the federal government will then just pay to put those people on the Obamacare exchange insurance plan.

    Obamacare subsidizes the premiums for people through a tax credit that gets paid to the insurance company, and the subsidy for this group of people costs between $2783 and $8524 per year, depending on age (insurance premiums increase as people get older, and so do the Obamacare subsidies.)

    Let’s look at a 42 year old person at 119% of the FPL. This puts him in the middle of the age range and the expansion range. If Ohio does NOT expand Medicaid, the federal government will spend $3722 to put him on a policy from the Obamacare exchange. Don’t believe me? Go here and find out for yourself.

    As you can see, as long as we are stuck with Obamacare, the federal government is going to spend money on this group between 100% and 138%, whether the state expands Medicaid or not.

    This is why we don’t see Medicaid expansion as some hill to fight for and plant our flag in here at 3BP. The extra Obamacare money is going to be spent either way. The only way to save it from being spent is full repeal of Obamacare. Which, of course, Governor Kasich and the state legislature can’t do.

    In all of the emails and press releases that the Ohio Liberty Coalition sends out, they never tell their members about the 100-138 group getting money to go on the exchange if their state doesn’t expand. They whip their members into a frenzy by only telling them half of the story.

    They tell them that rejecting Medicaid will prevent billions of federal dollars from being spent on Obamacare in Ohio, which is patently false. The way Obamacare is written, they will spend money on this 100-138 group either way.

    We’re used to this kind of deception from liberal groups, but it’s disappointing that it’s now coming from our usual allies in the tea party.


    I was born and raised in Ohio. After growing up in the Columbus area, I moved to Cleveland to study at Case Western Reserve University, and have lived in Northeast Ohio ever since. I live in Wellington with my wife and son. I work in the private sector and have never worked in the political field.


    16 Responses to How the tea party is misleading about Medicaid expansion

    1. Bryan
      May 6, 2013 at 8:22 AM

      OK, please help me ensure I understand. If Ohio expands Medicaid, it will be for people between 100% and 138% of the FPL, right? And if that happens, the feds will spend on average 3315 per adult for them to be on Medicaid. If Ohio does not expand Medicaid, then the feds will pay for their insurance at a cost of 3722 through the exchanges. Have I got that right?

      • May 6, 2013 at 9:08 AM

        Those are average numbers, but yes. The Medicaid spending per adult is from 2009, which is the most recent I could find, so it would be slightly higher.

        But the point is that if Ohio rejects medicaid expansion up to 138% FPL, those new people will still get federal funding to put them on the exchange.

        The OLC never tells people that. By omitting that information, they are only telling half the story and leading people to believe that rejecting expansion saves all that money, which it doesn’t. It just shifts the spending from Medicaid to the exchange subsidies.

    2. Bryan
      May 6, 2013 at 12:02 PM

      so are “they” complaining about the spending, which will happen anyway? or is there something else they don’t like about it?

    3. Chuck
      May 6, 2013 at 2:02 PM

      When the federal spending for the 100-138% gets reduced the State will have to pick it up. That’s the problem. – When you ask for transparency it helps to have some yourself.

      • May 6, 2013 at 6:36 PM

        Nope, but nice try to deflect away from OLC’s deception. Their first argument is always the federal dollars spent and pretending that expansion of Medicaid is actually an “implementation” of Obamacare. Both are false. The true barrier to implentation of Ocare is the states that refuse to run their own exchanges and let the feds run it. Ohio is one of those states.

    4. May 6, 2013 at 6:45 PM

      Reimbursement is also an issue. Medicaid has a very small network of providers that accept it compared to traditional insurance. Ohio’s Medicaid network probably couldn’t handle 200,000 new enrollees, or even half that.

      Medicaid also reimburses at a rate most providers say they lose money, particularly hospitals. The hospitals use this as an excuse to overcharge private insurance. If you add 200K underpaying individuals to Medicaid the hospitals would probably use it as an argument to overcharge private insurance even more.

      Medicaid is riddled with eligibility and provider fraud, private exchange plans would manage this better.

      Medicaid is far more aggressively enrolled. The exchanges will be harder and take longer to sign up so you would expect many of the health uninsured, the vast majority of them, to not bother.

      When the Feds go broke and stop funding this titanic failure to be do you want to be the governor who throws poor helpless kids and single moms of Medicaid or let the evil insurance companies do it when the feds stop subsidizing the policies?

      Those are the main reasons off the top of my head not to expand Medicaid, could probably come up with another 100 if I thought about it.

    5. May 6, 2013 at 6:57 PM

      Some good points. And as I said, I am not defending or arguing against expansion. I am really indifferent because both are bad situations brought on by the passage of Obamacare itself.

      Your point about hospitals losing money is not accurate, however. Right now, when uninsured people go to the ER because they dont have coverage, they have to treat them and get nothing in return. The hospitals want expansion because at least they will get something.

      they currently get some funding to help offset treating uninsured patients (charity-care). But Obamacare eliminates this funding since they assumed no one would be uninsured anymore because everyone by law is now required to be enrolled.

      In any case, the points you made are not the ones made by the OLC. Their first argument is always the federal government being $16 trillion in debt and imply that refusing expansion will save all those dollars. they hide the fact that those people in the expansion would still be given obamacare dollars through the exchange subsidies. Its dishonest.

      • May 6, 2013 at 7:07 PM

        getting nothing on some ER visits, besides a nice write off and to claim how charitable you are is nothing compared to someone that is now “insured” and feels the right to use it frequently. The Oregon Medicaid study supported this.

        Cleveland Clinic made 300+ million their last fiscal year, that would never be tolerated except they claim to do so much charitable work. Take away the questionable charity care and look at what they do to private payors and justify their tax exempt status.

        The other issue, maybe the biggest, is look at the history of Medicare. Medicare as originally written was not nearly as bad as it is today. For example it was required by law to reimburse providers at market rates. Once they eliminated the market for insurance they just did away with that provision. If the government adds millions more to Medicaid plus the baby boomer growth in Medicare your quickly reaching a tipping point where they could kill the private market. If you force the Medicaid people into the private market instead you make it that much harder for those on the left to get rid of it.

        • May 6, 2013 at 7:11 PM

          The same thing will happen with people on the exchanges, too, who are getting coverage for almost free.

          Its why Obamacare is bad all around. Whether the 100-138 group is put into medicaid or the exchanges, the same bad effects will still come back to bite us. Not to mention the exchange folks over 138%.

          Full repeal is the only option. Whether states expand medicaid or not is just a minor detail.

    6. May 7, 2013 at 7:12 PM

      Ok, I still don’t understand. Consider me dense. WHY would we want to expand Medicaid when Ohio will eventually get stuck with the entire bill? And don’t the Feds have to pay for the expansion if we do nothing? I’m open to what you are saying but not really “getting” it. I’ve received the Liberty Council’s missives but felt they were right in wanting to pour water on the flames of expanding this bonfire. Plus I have the uneasy feeling that Kasich is trying to appease Leftists to get reelected.

      • May 7, 2013 at 8:25 PM

        Well, I dont know why you say that Ohio will eventually have to pay for the entire bill of expansion. That is false. The Feds pay 100% of the expansion for a few years and eventually that drops down to 90%. Not 0%.

        Obamacare is very confusing and complicated, so its easy to get confused.

        Keep in mind, my post is not pro-expansion or anti-expansion.

        I also dont have a problem with OLC or anyone else being anti-expansion. But what I do think is wrong is all of the lies that the OLC is using to spread their message and conduct their slash and burn campaign against Kasich.

        Its dishonest to talk about how much expansion is going to cost the federal government and say that Kasich is promoting more federal spending, when the Feds are going to spend the same amount of money if Ohio refuses expansion.

        Its dishonest to say that states that expand medicaid are “advancing Obamacare”. Obamacare is going to be implemented by the Feds no matter what, unless it is repealed.

        Whether Ohio expands Medicaid or not will be a minor footnote in the history of Obamacare.

        • May 7, 2013 at 10:31 PM

          OK, it was my understanding that after 3 years the 10% Ohio was going to have to pay would probably end up being a lot more than the dodo birds who designed Obamacare guessed it would be.

          Plus I read somewhere that, given the vast overspending the feds do, and given that the Medicaid split is usually about 40/60, state/feds it will eventually turn toward the states to pay more and more.

          I only read the OLC emails with a half interest, so maybe I didn’t see the “deception” of which you speak. My concern about Tea Partiers as that most of us are novices and tend to get too excited without knowing all the facts first. You wouldn’t believe the number of emails I get that no one bothered to check out at Snopes or other websites.

          The problem is no one trusts anyone anymore. Thanks for your reply.

          • May 7, 2013 at 10:37 PM

            For current medicaid enrollees, at 100% of poverty or below, the Feds pay about 2/3 and Ohio about 1/3.

            The expanded group would be funded differently (100% now, 90% later), and Ohio has stated that if the Feds ever change the rules, Ohio would withdraw from expansion.

            I understand what you are saying and that’s what I believe the OLC is counting on. People just reading the headlines and skimming and taking their statements at face value.

            I’m really disappointed in how they have conducted this campaign so far. I used to have much more respect for the group.

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