We have all heard the term, “predatory lender”, after the housing bust that devastated the US economy. Now our Governor has caved in to “predatory federalism” by yielding to Presidential pressure to vastly expand Ohioʼs medicaid rolls as part of the implementation of Obamacare, the massive Patient Protection and Affordable Care Act. This expansion will, if enacted, mire the poorest Ohioans in an unsustainable health care scheme leaving a mountain of debt in its wake.

How does Kasich, the former conservative US House Budget Chairman who proudly takes credit for balancing the federal budget in 1997, arrive at this decision?

Weʼd like to know because, Governor Kasich, you know better, and hereʼs why:

26 States, including Ohio, fought Obamacare mandates all the way to the Supreme Court. Their one victory was a ruling that the States could not be forced by the federal government to expand Medicaid, a program whose ballooning costs already threaten future generations with financial ruin. Having won Ohioʼs freedom from this federal hijacking of the statesʼ right to control Medicaid costs why surrender this victory by yielding now?

Although the federal government promises to pay 100% of the cost of a stateʼs Medicaid expansion for three years, reducing to 90% thereafter, this is a mirage. Using a high introductory rate, the federal government is snaring states to accept a deal the feds cannot fulfill long term. Eventually, the Medicaid reimbursement rate will need to be reduced and Ohio taxpayers will be left holding the bag. The US government is $16.4 trillion in debt with $6 trillion of that having been added in just the past four years. No government can withstand this type of debt accumulation especially one whose economy is experiencing only 1.5% growth.

The federal government cannot be counted on to fulfill its promise to match the cost of Medicaid expansion and Governor Kasich agrees. He stated as recently as August 2012:

“Now, when it comes to Medicaid expansion the government tells me, ‘Well, we’ll pay 90% and you pay 10.’ Well I’ve been in Washington, unfortunately, and today it’s 90 and tomorrow it’s 80 and the next day it’s 70.” (Kasich, Coffee & Markets podcast, August 2, 2012)

Obamacare expands dependence on government healthcare

The Kasich administrationʼs predicted cost of Medicaid expansion is based on flawed assumptions. Today, the Governorʼs proposal predicts that the Obamacare plan will add just 275,000 Ohioans to the Medicaid program. But, a year ago, the independent Milliman Report commissioned by Kasichʼs Department of Insurance, projected that under the Obamacare mandate, Ohioʼs Medicaid enrollment will increase by 922,000 in 2014 and 1,197,000 in 2017. How can the public rely on the Governorʼs budget predictions when such critical data is understated by nearly 400%?

The match that the federal government promises only covers the cost of new Medicaid benefit spending. The state of Ohio will incur new administrative costs as more individuals are added to Medicaid. The Congressional Research Service estimates that for every $100 in new Medicaid benefit spending, Ohio will incur $2.48 in additional administrative costs. Any realistic budget proposal needs to take such costs into account.

Governor Kasichʼs Medicaid expansion program cynically disregards the reality Ohioans will face when the federal government is no longer able to fulfill its matching of Medicaid expansion dollars. Our children and grandchildren will not be in a position to ignore this reality and will pay the price with untenable taxes and economic stagnation. Governor Kasich says it best in his own words:

[box]“In the end, the federal government will just rack up higher deficits and go deeper in debt, leaving future generations to pick up the tab.” (Kasich campaign blog post, March 22, 2010)[/box]

The Governorʼs promise to rollback Medicaid expansion should the feds fail to fulfill their agreement is impracticable. History proves that once an entitlement is in place, it is never cut.

Cost of President’s Health Law Rises With Each New Estimate

Forcing more Ohioans into Medicaid, a welfare program racing to insolvency, is not a compassionate answer to Americaʼs health care problems. Already, one third of all doctors refuse to accept Medicaid patients. As Obamacare is implemented reducing reimbursement rates to doctors, this number will inevitably increase. Tellingly, a University of Virginia study has found that Medicaid patients have worse surgical outcomes than patients without insurance. Through Medicaid expansion, the Kasich administration is in effect balancing short-term budget gains on the backs of Ohioʼs poorest citizens and subjecting even more individuals to a welfare program no bureaucrat would wish upon his own family.

Experience shows that this extraordinary expansion of Medicaid where physician reimbursement is below cost will further shift costs to insured patients via higher premiums.

The assertion that Medicaid expansion will ensure that more federal tax dollars are kept here in Ohio is a hollow argument. It ignores our responsibility as US citizens to advocate for the best policies for our nation. The federal cost of Medicaid expansion across all states is projected to add nearly one trillion dollars to the national debt, $931 billion. Since we are all federal taxpayers, arenʼt we all ultimately subject to the national cost of Medicaid expansion?

Who’s Calling the Shots in Ohio??

President Obama with White House Senior Advisor Valerie Jarrett

Governor Kasich boasts of working with the Obama administration, and specifically Valerie Jarrett, to iron out the details of Medicaid expansion in Ohio. Collaborating with the primary political operative for Obamacare and with an administration that has misrepresented Obamacareʼs cost and promised benefits concerns many Ohioans. The administration has underestimated Obamacareʼs cost by at least 2 trillion dollars. And insurance premiums, originally predicted to decrease by $2,500, will increase 55-85% in Ohio, according to the actuarial firm, Milliman. Most concerning, the Kasich-Jarrett plan will consign another one million Ohioans to the dead-end trap of nationalized health care.

For Governor Kasich, who faces re- election next year, Medicaid expansion is a means to balance the budget in the short term while reducing state income taxes. It will also further promote the implementation of Obamacare, a policy categorically rejected by 66% of Ohio voters in 2011 when they passed the Health Care Freedom Amendment. Kasichʼs short sighted and self serving proposal to expand Medicaid will harm the long term financial solvency of our state. It is unfortunate that Governor Kasich has failed to join the 11 principled governors who have turned down Medicaid expansion, opting instead to advocate for fiscal responsibility and the long term financial health of their states and our nation.

Governor Kasich presenting his budget, “Jobs 2.0” (left); White House Senior Advisor, Valerie Jarrett (right)

What’s the solution?

We reject the predatory federalism being forced upon the state of Ohio, and propose instead, a true federalist model based on state sovereignty and the right of states to act as laboratories of democracy establishing Medicaid programs that address their unique needs. This could be accomplished through block grants to states approved by Congress. If the burden of the federal bureaucracy is lifted, innovation and real solutions will result.

Make a difference:

Call and email your representatives to let them know that YOU know better … Medicaid expansion is the wrong decision for Ohio.  Flooding the Ohio House and Senate with your opinion is the best way Ohioans have of fighting back and ensuring financial solvency for the state of Ohio. Your children and grandchildrens’ future depends upon it.

Ohio Senate Directory:  http://www.ohiosenate.gov/senate/members/senate-directory

Ohio Senate District Map:  http://www.ohiosenate.gov/members/senate-district-map

Ohio House of Representatives District DIrectory:  http://www.ohiohouse.gov/members/member-directory

Ohio House of Representatives District Map:  http://www.ohiohouse.gov/members/district-map

Learn More:

Arm yourself with facts so that you can spread the word as you talk to your representatives, friends, neighbors and family. An informed electorate is the best defense against an out of control government.