Oct. 22—Ohio became the 25th state to approve an expansion of Medicaid eligibility this week when a state panel circumvented legislative opposition. But challenges loom for its supporters. 

A seven-member Controlling Board—comprising legislators and an administration appointee—approved the expansion of Medicaid, 5-2, after the Republican-led legislature opposed opening the program to all residents with incomes of up to 138 percent of the federal poverty level. The expansion, which was authorized by the Affordable Care Act (ACA), is expected to increase coverage to 275,000 more residents, according to estimates from Gov. John Kasich (R).

But the method used to approve the expansion is expected to bring lawsuits, according to local media reports.

The Economics Behind the Decision

Legislators also said they planned a bill to cut about $400 million in hospital funding from the state budget and allocate it instead for a tax cut. Ohio’s hospitals, which provide more than $1.2 billion annually in uncompensated care, led the Medicaid expansion push and are expected to primarily benefit from it, since it will provide coverage to some of those uninsured.

Any state cuts would come in addition to $7.4 billion in ACA cuts to Medicare and Medicaid hospital funding over the next 10 years, according to the Ohio Hospital Association (OHA).

“Today, the cost of providing health care for Ohio’s uninsured citizens are being borne by nearly 10 million other Ohioans, employers, and Ohio hospitals,” Mike Abrams, president and CEO of OHA, said in a February release.

Advocates for the expansion touted the projections of a January report that Ohio would gain $1.4 billion in savings and create more than 30,000 jobs over the next decade by expanding Medicaid eligibility.

Other Expansion Developments Coming

The number of states expanding Medicaid could grow beyond Ohio this year. Advocates in New Hampshire are still pushing for legislative action to grow the program in that state.

New Hampshire legislators approved a special legislative session next month to consider the Medicaid expansion. The legislature, control of which is split between the two parties, declined the expansion earlier this year. But a panel established to weigh growing the program recommended a Medicaid expansion.

"With $2.5 billion in federal funds available to expand health coverage for up to 50,000 hard-working Granite Staters, we have a significant opportunity to improve the health and financial well-being of our families, strengthen our economy, and improve our state’s financial future,” Gov. Maggie Hassan (D) said in a release about the Nov. 7-21 session.

Many expanding Medicaid states, including Ohio, also are likely to reduce the likelihood that residents will have coverage disruptions as their income fluctuates, according to new findings from Avalere Health.

The healthcare consulting firm found Ohio was one of 30 states where at least one health insurance plan will operate as both a Medicaid managed care organization and an option on the state’s health insurance marketplace, or exchange. The availability of the same plan would allow policyholders to maintain the same provider coverage regardless of whether their income fluctuations change their eligibility from Medicaid to the marketplace, or vice versa. Such income-based coverage disruptions among low income beneficiaries, known as churn, was a major concern of ACA coverage expansion advocates.

Publication Date: Tuesday, October 22, 2013