Why Expanding Medicaid Under ObamaCare Was a Bad Idea
Medicaid now swallows 50% of all state spending, thereby crowding out other spending priorities and the ability to eliminate the state income tax.
Way back in June 2013, I wrote a piece “Keep Your Eye on the Ball: Reject Expansion and Build the Foundation for Real Reform” in which I implored the Ohio General Assembly to reject Governor John Kasich’s push to expand Medicaid under Obamacare. They fought a valiant fight, but Kasich teamed-up with backstabbing Speaker of the House Bill Batchelder (his sycophants conveniently ignore this very non-caveman conservative move that crushed Ohio’s budget in perpetuity) to replace “no” members with “yes” members on the committee that could evade the Ohio General Assembly by approving expansion spending, which then happened. Kasich’s estimates on the enrollment growth and cost of Medicaid expansion, as I stated at the time, proved to be catastrophically wrong. As I wrote in January 2015 in “Why Expanding Medicaid Remains a Bad Deal for Taxpayers” in response to Kasich’s reckless approach to just pile more money on to federal deficits and debt:
Contrary to Governor Kasich’s view, the best course of action is not to hasten the fiscal collapse of the federal government by increasing deficits and the national debt, thereby guaranteeing states will be forced to carry a greater share of the costs and taxpayers will be hit with higher taxes as part of an entitlement “reform” package. As a wise man once said, when you find yourself in a hole, the best thing to do is stop digging.
Unfortunately, Ohio has yet to stop digging.
Kasich was wildly wrong about so much, especially his fantasy estimates on how many Ohioans would be added to the Medicaid rolls. Kasich topped out at 366,000 on his second try, which was not much better than his first try. After reaching a high of just under 3.6 million enrollees in April 2023, Medicaid currently has 3.27 million enrollees, or 875,000 more than it did BEFORE Kasich’s expansion and just 26,000 less than the Kaiser Commission’s estimate back in 2013. Too bad being spectacularly wrong in politics comes with no consequences.
The most interesting part about my January 2015 piece is that I estimated what the spending would look like by 2026 under several scenarios. My estimates ranged from a low of $3.8 billion more in spending to a high $14.2 billion more. The year before Kasich’s expansion, Medicaid spending totaled $17.3 billion, with state spending at $12.5 billion. In the most recent fiscal year ending July 31, 2023, it cost taxpayers $27.0 billion, with state spending at $18.5 billion. Thus, Medicaid now cost $9.7 billion MORE THAN it did before Kasich’s expansion, with Ohioans on the hook for $6.0 billion more annually. To match up with the chart above re spending in 2026, if you use the actual annual average increase that occurred over the last decade to project where spending will be, state spending will be at $21.1 billion, or $8.6 billion more than in 2013. That figure is substantially MORE THAN my 10% state-share estimate of $3.8 billion (adjusting for inflation it is now $4.9 billion), which proves what I wrote back then that enrollment and spending will far exceed everyone’s estimates. Medicaid now swallows 50% of all state spending, thereby crowding out other spending priorities and the ability to eliminate the state income tax.
Hopefully, the states that haven’t yet fallen for the Medicaid expansion trap don’t follow Ohio’s lead. The data on it being a terrible fiscal idea is simply too overwhelming to deny at this point. As I’ve argued, Ohio needs to repeal Kasich’s Medicaid expansion so that it can move towards the total elimination of the state income tax, which cannot be done without eliminating Medicaid expansion. Eliminating the state income tax is one of three key policies that Ohio must enact if we want to get Ohio thriving again. Making Ohio the tenth state to eliminate the state income tax would jumpstart our jobs economy and make Ohio infinitely more attractive to those here thinking about leaving and those best and brightest non-Ohioans we want to come here.
Sadly, I am one of the few voices in Ohio pushing Medicaid expansion repeal and elimination of the state income tax. Everyone else just nibbles on the margins of our problems.
P.S. In follow up to my numerous columns on the private sector, the chart above is very revealing about Bidenomics. Notice that the biggest gains are in government, government funded healthcare (i.e., Medicaid and Medicare), and the lower wage leisure and hospitality industry. Most of the other industries are just plodding along (professional and business services, retail trade, and financial activities), stagnating (manufacturing), or declining (transportation and warehousing and information). The wages and price part of the chart is grossly deceptive, as the percentage change doesn't reflect actual numbers. So while prices (dotted black line) increased massively more than earnings for all of 2022, which crushed Main Street Americans, then largely matched earnings in 2023. That essentially means prices today remain much higher than earnings (due to the huge jump in 2022), as prices NEVER went negative (i.e., shrunk) or below earnings growth, thereby leaving consumers still well underwater.