Primer: What Medicaid expansion could mean in Ohio, Kentucky and Indiana

Medicaid debate continues in Columbus

CINCINNATI - UPDATE: The Ohio House on Thursday night adopted an amendment that leaves the door open for possible Medicaid expansion in Ohio. The amendment could result in other reforms to the state's Medicaid program, too. The change was included in the state's two-year budget plan, which was sent to the Ohio Senate. Under the proposal, changes to Medicaid would likely be decided later this year after a budget is approved.

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Matt Horejs is nobody’s preconceived notion of “the uninsured.”

He’s a college graduate with an MBA and experience as a public accountant. But his world turned upside down in 2007 when what had been a case of latent obsessive-compulsive disorder suddenly became severe.

“The dreams and plans that I had simply got wiped off the map in a matter of days,” Horejs said.

The years that followed for Horejs were marked by months of unemployment and a subsequent job that lasted about a year. He got treatment only when he could afford it, making it difficult for him to keep a job and be the functioning, self-sufficient person he ached to be.

He eventually qualified for Social Security disability benefits and Medicare. And a month ago he got a job as assistant to the director at a local school.

“I’ve had a lot of lucky breaks,” said Horejs, now 29. “Even with those, I think I’ve just barely managed to get out of the hole. And many people are not that fortunate.”

Those people, Horejs argues, are why the state of Ohio should expand Medicaid, the federal program that provides health care for low-income families and individuals. The expansion that Gov. John Kasich wants would include unmarried, childless adults with low incomes and no employer-provided health insurance.

The kind of person Horejs used to be.

Complex Issue, With Pros and Cons

To expand Medicaid or not to expand – that is the question confronting elected officials in Ohio, Kentucky and Indiana. Ohio legislators are considering the question this week as they continue to deliberate the state’s two-year budget.

Lawmakers and governors in all three states are working to decide what makes the most sense for residents and their states’ long-term financial health.

The issue is complex.

On one side, there are business, community and religious leaders pushing for the expansion, which would ensure that each state’s poorest residents have access to health care. That was the original intent of the Affordable Care Act, more commonly referred to as Obamacare.

“There’s more of an income gap in our history than there ever has been,” said Margaret Fox, executive director of the Metropolitan Area Religious Coalition of Cincinnati, one of the three dozen local organizations advocating for expansion. “We, as a just society, need to step up and support Medicaid expansion in Ohio now.”

But critics argue states could eventually get stuck with the bill for such an expansion, saddling state governments with billions of dollars in expenses they can’t afford to cover a group of people who could get coverage in other ways if they got jobs.

“This is a relatively narrow group of individuals to whom this applies,” said Robert Alt, president of the Buckeye Institute, the conservative think tank that’s been arguing against expansion. “The solution really does seem to be getting more of these people into an employment situation.”

Next page: What You Need To Know

A Primer: What You Need To Know

WCPO Digital posed a series of questions about Medicaid expansion to experts, advocates and critics. Their answers are included in the following primer.

What is Medicaid?

Medicaid is a state and federal health care program. It provides care to elderly people in nursing homes, people with disabilities, children and working families. Federal law allows each state to operate its own Medicaid program, and states have different rules about who is covered.

Who is eligible for Medicaid now?

Medicaid is different in every state. Those now eligible in Ohio include:

·      Children and pregnant women are eligible for Medicaid if their household income is 200 percent of the federal poverty level or lower. That would be roughly $47,100 or less for a family of four.

·      Unemployed parents are eligible if their incomes are 90 percent of the federal poverty level or lower. That amounts to just under $22,000 or less for a family of four.

·      Working parents are eligible up to 96 percent of the federal poverty level, or household incomes of just over $22,600 or less for a family of four.

·      People with disabilities and elderly people who need long-term care are eligible up to 64 percent of the federal poverty level. That’s an income of roughly $7,354 for an individual.

·      Adults who are younger than 65 and are not disabled with no children aren’t eligible for Medicaid, no matter how poor they are.

·      In Kentucky, individuals or families with dependent children may be eligible, depending on their incomes, if they are: pregnant women; dependent children younger than 19, parents if one parent has left the home or can’t work because of sickness or disability or if one parent has died; or parents living with their children if the parent is “unemployed or underemployed.”

·      Eligibility in Indiana is based on income, family size, age, assets and medical needs. Children, pregnant women and low-income families may be covered by Hoosier Healthwise. Care Select is Indiana’s health care program designed to serve people with special needs, such as being blind, disabled, wards of the court and foster children.

The 2013 federal poverty level is $23,550 for a family of four.

Who would be eligible under the expansion?

The Affordable Care Act required states to expand their Medicaid programs so that all adults would be eligible if their household incomes are 133 percent of the federal poverty level or less. For a single, unmarried adult, that would be an income of just under $15,300, according to the federal government’s latest guidelines. That would make an additional 275,000 adults in Ohio eligible for the program, according to figures calculated for the Kasich administration.

So why do states have a choice now?

The U.S. Supreme Court ruled in June 2012 that the federal government couldn’t penalize states if the states refuse to expand Medicaid. So states now have the option of whether to expand or not. The federal government hasn’t set a deadline for states. As of March a total of 25 states support the expansion, according to The Advisory Board Company, a global research firm.

Why should I care?

Most residents get health insurance through their employer, said Maureen Corcoran, president of Vorys Health Care Advisors LLC in Columbus. But studies estimate that you also pay about $1,000 more a year in insurance premiums to help cover the costs that hospitals incur from treating people who are not insured, she said. If expanding Medicaid helps nearly everyone get health insurance, that should reduce costs or at least slow the future rate of increases in health care costs for all of us, Corcoran said. It also should mean shorter waits at emergency rooms if poor people can get better primary care instead of waiting until problems are bad enough to go to the hospital, she said.

What about small businesses?

The issue won’t affect all businesses the same. But one local CEO was surprised about what it will mean for her.

Mary Miller’s Jancoa Janitorial Services offers health care coverage to its 320 full-time employees. Only 6 percent of them take it, though. Miller figured getting all her employees on the policy once the Affordable Care Act takes effect would cost her more than $1 million.

But, during Miller’s recent visit to Columbus, Kasich told her many of her low-income workers who opt out of Jancoa’s insurance plan would qualify for Medicaid under his expansion plan. And Jancoa wouldn’t be penalized if those employees go with Medicaid instead.

“There’s a lot of businesses like mine that employ the low-income workers that have to stay in business,” Miller said. “When Gov. Kasich told me that, I told him, ‘This probably saved me a half million dollars.’ I was blown away.”

Now Miller is part of the broad coalition trying to get Medicaid expansion included in Ohio’s two-year budget.

Next page: How much will it cost states?

Will it cost states a lot of extra money?

It’s not supposed to. The way the law is written, the federal government covers all the costs of expanding Medicaid for states for the first two years, Corcoran said. Over the next several years, that amount is reduced gradually. But the federal government is supposed to cover 90 percent of the added cost in perpetuity, Corcoran said. In other words, forever. Opponents don’t believe that will happen.

So what’s at issue for states who opt out?

Critics of the idea worry that Congress will change the deal if the federal government gets strapped for cash and that states will be left paying the extra costs. Some also argue that Medicaid is a bad system. Alt of the Buckeye Institute notes that a University of Virginia study of about 900,000 major operations in the U.S. found surgical patients on Medicaid were 13 percent more likely to die in the hospital than people who were uninsured. People who support expansion say there are other studies that point to the value of Medicaid and the services it provides.

What happens if a state decides not to expand Medicaid?

There would be thousands of poor people who would not have any coverage. The health care exchanges that will be created as part of the Affordable Care Act are designed to cover individuals and families who earn 100 percent of the federal poverty level or more. That’s $23,550 for a family of four or $11,490 for an individual. Childless adults who are younger than 65 and earn less than that wouldn’t be covered by anything, Corcoran said.

What about Kentucky and Indiana?

They too must decide whether to expand Medicaid. Kerri Richardson, communications director for Kentucky Gov. Steve Beshear, said state officials are “still gathering information” and “no decisions have been made yet.” She added, “if it’s affordable, the governor has said he wants to expand the program to bring adequate health care to more Kentuckians.” That would be an additional 288,000 adults in Kentucky, according to the Center on Budget and Policy Priorities.

Indiana Gov. Mike Pence believes the “traditional Medicaid program is not in the best interest of Hoosiers or the continuing fiscal health of our state,” his press secretary, Kara Brooks, said. "Studies show that over time consumer-driven health care programs reduce costs. That’s why the Governor is insistent that any discussion about the possibility of expanding Medicaid in Indiana must begin with the Healthy Indiana Program." That program is for uninsured Indiana adults between the ages of 19 and 64. The Center on Budget and Policy Priorities says an additional 374,000 Indiana adults would be eligible for Medicaid under an expansion of that program.

I have health insurance through my job now. But what happens if I lose my job and my coverage?

Under the current system, you can probably keep buying coverage through COBRA continuation health coverage. For many people, that’s prohibitively expensive, said Col Owens, senior attorney with the Legal Aid Society of Southwest Ohio. When the Affordable Care Act takes effect in January, COBRA will still exist. But as a practical matter, nobody with a household income lower than 400 percent of the federal poverty level – or $94,200 for a family of four – would choose that system. Instead, those people would likely buy insurance through one of the health care exchanges that’s established. And if Medicaid gets expanded, unemployed people whose incomes are low enough could qualify for that.

What happens next?

In Ohio, lawmakers are continuing to debate the issue as they work on the state’s two-year budget. Proponents are pushing to have the Medicaid expansion put back into the state’s budget. Several thousand supporters rallied in Columbus earlier this month to support the expansion. “I do think it’s going to happen,” Owens said. Greg Moody, director of Ohio’s Office of Health Transformation, is expected to appear before the state Senate Finance Committee Thursday morning to make the case for expansion.

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