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How the tea party is misleading about Medicaid expansion

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.

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Third Base Politics is an Ohio-centric conservative blog that has been featured at Hot Air, National Review, Washington Post, Los Angeles Times, Pittsburgh Tribune-Review, and others.


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