The Senate Medicaid Subcommittee served up a little Kool-aid last week when they heard the much anticipated findings of a study they commissioned from Ohio State University and the Health Policy Institute of Ohio as part of the Senate’s Medicaid reform effort. The study looked at different growth rates of the cost of Medicaid with and without Medicaid expansion to determine if overtime the state could spend less money on the program even if enrollment was increased.
Well, it turns out that given enough time, even very large numbers multiplied by small rates of growth will produce a lower result than smaller numbers multiplied by high rates of growth. That, in a nutshell, is what was discussed at the committee hearing as straight faced politicians asked questions of the academics.
Slides were shown to add further proof that basic math works. Line charts illustrated that with no expansion and the current 7.2% growth rate of Medicaid spending, Ohio will shell out $19.9 billion on Medicaid in state fiscal year 2014 increasing to $43.4 billion in 2025. With Medicaid expansion and a lower spending growth rate of 4.5%, Ohio will pay out more in 2014 on Medicaid, $20.6 billion, but by 2025, and after letting math do its magic, Ohio will spend less, $37.2 billion, on Medicaid.
While the OSU/HPI study would be a great exercise for a high school math class, the study did nothing to move forward the discussion of Medicaid reform. We can multiply numbers by different growth rates all day long, but the real question is, in practice, can Ohio truly lower the growth rate of Medicaid spending to make the math a reality? The answer is, we don’t know, because no one at the hearing discussed actual reforms to the Medicaid system that could realize a lower Medicaid spending growth rate. You would not know this, though, by listening to the politicians after the meeting and by reading the headlines. The Columbus Dispatch, in its article titled, “Ohio could save and expand Medicaid, study says”, quoted Subcommittee Chairman Dave Burke as stating,
“To me, that is the first fact-based analysis by any party that has shown you can lower costs, both federal and state, if you craft the right policy to get there.”
But, to be fair, not all committee members imbibed in the refreshments. Gongwer reported Senator Jordan asked if expansion participants would ever be able to transition off Medicaid given the rise in premiums under Obamacare. Jordan also mentioned he did not want to harm the millions of Ohioans on private insurance alluding to the fact that more Medicaid patients mean more cost shifting by hospitals to private insurers.
“That’s another concern we all need to pay attention to: how will it affect private insurance? I also don’t want to negatively impact the several million people with private insurance in this state, but that seems to be the direction we’re heading and this plays a key part in the market, as well.”
Gongwer also reported Senator Coley asked the panelists if they expected to see the number of health care providers grow under Medicaid expansion raising the concern many have that Ohio will not have enough doctors who will accept the new Medicaid enrollees.
For those paying close attention to the committee proceedings, several additional points were noted. HPI/OSU based their assumptions on the Medicaid expansion enrollment projections of the 2011 Milliman study (848,000) commissioned by the Ohio Department of Insurance rather than the lowball expansion estimates coming out of the Kasich administration (275,000). OLC has repeatedly pointed out Kasich’s projections are fraudulent and it is nice to know that someone is listening.
Additionally, OSU/HPI included in their report an analysis of Medicaid costs if the federal government should back out of their Medicaid expansion funding promise. The study went so far as to include a slide titled, “What are potential sources of funds to offset higher state cost, if needed?” Furthermore, the report did not assume Kasich’s rollback mechanism would go into effect should the federal match rate decline. OLC has consistently maintained the federal government cannot be counted on to pay for Medicaid expansion and the idea that expansion participants would be kicked out of the Medicaid program if and when the federal match drops is a foolish and cruel notion.
So what can be taken from the pomp and circumstance of the Medicaid Subcommittee hearing? For one thing, Medicaid reform is not a serious effort because no real reforms to the Medicaid program have been put forth. Politicians and academics are spending their time in Algebra I while Ohioans are looking for some leadership in the fight against Obamacare. But while even Obamacare can be dressed up with a little math, the OLC doubts anyone will be asking her to the prom.
The HPI/OSU analysis can be found here.
The HPI/OSU presentation to the Senate Medicaid Committee can be found here.
Gongwer reports found in Volume #82, Report #157, Article #1, “Analysis: Medicaid Expansion Fiscally Feasible”, Tuesday August 13, 2013