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The Cost Of Expanding Medicaid Debated In Dayton

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The discussion over extending Medicaid came to Dayton this week. Members of the Ohio Senate Finance Subcommittee came to CareSource to hear how Medicaid expansion would affect Ohioans and the state’s bottom line. Emily McCord speaks with WYSO's economics reporter, Lewis Wallace, who reports that health care advocates point to a study that shows Ohio can expand Medicaid while saving money at the same time.

A special Senate Subcommittee on Medicaid Finance was in Dayton Wednesday to hear from major health plan providers about cost-cutting measures in state Medicaid. The state administers Medicaid through public-private partnerships with companies like CareSource (the host of the hearing), Aetna and United Health.

The Medicaid expansion authorized by the federal Affordable Care Act goes into effect on January 1, 2014, but Ohio remains among eight states who have not yet decided whether they will participate in the program. ACA Medicaid would extend coverage to individuals who make up to 138% of the federal poverty level; in Ohio, around 270,000 people would become newly eligible. Without the expansion, those individuals could fall into a gap and be left ineligible both for Medicaid and for ACA subsidies.

But the expansion requires the approval of the state legislature, and while Gov. John Kasich has come out in favor, he’s met resistance from his own party in both the House and the Senate.

The major HMOs support an expansion, but on Wednesday they focused their presentations on cost-cutting measures and proposed reforms to Medicaid. Those reforms include increased care coordination, continuing the pharmacy benefit, integrating mental and physical health services, and payment reform; the phrase “Higher cost does not equal better health outcomes” was repeated several times.

Congressional Republicans have said they’re concerned about the potential future costs associated with a Medicaid expansion, and the Medicaid Finance Subcommittee is also concerned with cutting costs regardless. A study out in mid-August commissioned by the committee compares the cost of continuing the Medicaid program as is, with cost increases of about 7.2 percent per year, against the cost of capping that growth at 3.5 or 4 percent while also expanding Medicaid eligibility under the ACA. The study found that the latter compromise could actually save Ohio $200 million as soon as next year, and nearly $4 billion by 2025.

The subcommittee will take its findings back to the legislature in September, and some are hopeful that Republicans and Democrats will broker a compromise that allows for more to be covered by Medicaid while also cutting costs. Currently, the state spends over $6 billion per year on the program, which covers more than 2 million people.