Kasich Finesses Expense of Medicaid Expansion for Dubious Party

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Republican presidential candidate Ohio Governor John Kasich speaks to guests gathered for a town hall meeting at Doll Distributing on July 24, 2015 in Des Moines, Iowa.

Photo by Scott Olson/Getty Images

Nicholas and Robin Matney were unemployed heroin addicts when they signed up for Medicaid in 2014 thanks to an expansion in Ohio. They got clean through a program that typically costs taxpayers about $26,000 a person.

Without it, “I’d either be locked up, still using or dead,” said Nicholas Matney, 30, whose new job at a Mansfield auto-salvage company supports his wife and baby daughter.

Republican Governor John Kasich says it’s a moral imperative to expand the federal-state insurance program for the poor to cover the Matneys and more than 500,000 others. He says it reaps savings from better public health and less prison time. Yet the state spent $1.4 billion more than projected with about 152,000 unexpected enrollees for the first 18 months of expansion.

As he runs for president, Kasich is striving to outflank those who oppose enlarging what they see as a flawed program, using the language of evangelism to champion a product of President Barack Obama’s signature initiative. His campaign’s central hurdle is converting what many in his party see as an unredeemable sin into a virtue.

“The vast majority of people who vote in Republican primaries are not people who want to see Medicaid expanded, period,” said Stephen Moore, an economist with the Heritage Foundation in Washington. “When John Kasich says, ‘I took this Medicaid money and I’m spending this Medicaid money because I care about poor people,’ it’s insulting to people who don’t want to expand Medicaid.”

Kasich, 63, bypassed his Republican-controlled Legislature in 2013 after the U.S. Supreme Court gave states the option to expand the program. Thirty states have done likewise, including 10 with Republican governors, according to the nonprofit Kaiser Family Foundation, a research group in Menlo Park, California.

Kasich defends his decision on moral grounds, saying he wanted to help the poor, mentally ill and drug-addicted, rather than having them end up in costly emergency rooms, prison or worse.

“Everybody has a right to their God-given purpose,” Kasich said in the Aug. 6 candidate debate.

It costs $22,836 a year to keep someone in an Ohio prison, where almost a quarter of inmates are treated for mental illness.

Expansion affords treatment. About 201,000 enrollees, or 42 percent, had a claim for mental illness or substance abuse. To reduce recidivism, officials also have enrolled about 900 people leaving prison.

Restraining Expenses

Kasich’s team said expansion was possible because it first tamed the growth rate of Medicaid spending. The annual 9 percent increase from fiscal 2009 to 2011 declined to 4.1 percent in 2012 and 2.5 percent in 2013, said Greg Moody, director of the governor’s Office of Health Transformation.

“Having people in the system getting care in the right place at the right time just makes the system perform better overall for everybody else,” Moody said.

Expansion also reduced hospital charity care last year by more than $1 billion, or 66 percent, according to the Ohio Department of Medicaid.

Even so, the initial expansion projections were 365,616 enrollees at a cost of $2.56 billion for the 18 months ending June 30. Actual spending was almost $4 billion, with an average of 517,949 people enrolled during fiscal 2015.

The Kasich administration said that even with the increase, spending was $1.9 billion under budget in 2015. With expansion expenses projected to increase to $5.09 billion in 2017, including a $133 million state share, critics question whether it’s sustainable and wonder why Ohio didn’t pursue a state-based plan to lessen dependency on Medicaid.

They also ask how Kasich can call for a balanced U.S. budget while taking federal money for Medicaid and adding to the debt.

Define Conservative

Kasich says his record in Ohio shows it’s possible to revamp the program at the national level to control spending. He also won’t accept the idea that expansion isn’t conservative.

“Because I care about people who are addicted and mentally ill?” Kasich asked reporters in Council Bluffs in June when asked whether he’s conservative enough for Iowa voters. “How does that make you anything but a conservative?”

Kasich doesn’t typically mention Medicaid expansion unless asked about it. Questioners aren’t always satisfied.

“Allowing people to keep their own money is compassionate,” Rushad Thomas, 25, who works at the Calvin Coolidge Presidential Foundation in Vermont, said after quizzing Kasich at June event in New Hampshire.

Yet conservatives must give people the chance to succeed, said Arthur Brooks, president of the American Enterprise Institute in Washington.

“There’s a moral case always about expanding opportunity for people who need it most,” Brooks said when asked about Kasich’s position at a Cleveland forum this month. “Is Medicaid expansion the right way to do that? You should have a legitimate disagreement about that.”

While the governor’s opponents may think he’s vulnerable on the issue, it lets him appeal to middle- and working-class voters as a Republican “on their side,” said Kevin Madden, an adviser to Mitt Romney, the party’s 2012 nominee. “The question of whether or not it defines a Kasich candidacy is up to him.”

Robin Matney, 29, said she knows little about Medicaid’s political implications. She knows only that it provided treatment that otherwise was unaffordable.

“We literally gave up on life,” she said. “Without Medicaid, we could not have done anything besides keep doing what you were doing, which is how a lot of people stay stuck.”

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