Politics & Policy

Why John Kasich Is Fighting the New Health-Care Bill

Kasich at the White House, November 2016 (Reuters file photo: Kevin Lamarque)
It threatens the failed Medicaid expansion he championed in Ohio.

If Republicans measured politicians’ success by how many people they added to the welfare rolls, Ohio governor John Kasich would be the envy of his peers.

When Kasich took office in 2011, Ohio was rebounding from the Great Recession, and there were 2.2 million Medicaid recipients in the state. By this January, 3.1 million Ohioans were dependent on the program — more than a quarter of the state’s population. Already the largest item in the state budget when he became governor, Medicaid spending climbed slowly for the first half of Kasich’s first term and then skyrocketed by 35 percent in four years, from $18.9 billion in fiscal year 2013 to $25.7 billion in 2017.

Ohio’s Medicaid program exploded because Kasich chose to take Obamacare money to add able-bodied, working-age, childless adults to the rolls. That money is the driving force behind Kasich’s opposition to every Obamacare-repeal bill considered in Congress this session.

Kasich initially projected that 447,000 Ohioans would sign up for the Medicaid expansion by 2020. The $13 billion this would cost, he said, would be “Ohio money” he was “bringing back” to the state, warning that other states would get Ohio’s share of Medicaid-expansion money if Ohio refused it. The Congressional Research Service and Congressional Budget Office have both debunked this claim; Obamacare provided an open-ended promise of new spending for states that expanded Medicaid, not a predefined pool of expansion funding. Kasich also promised to end the expansion if costs got out of hand.

Ohio’s Medicaid-expansion enrollment was 720,000 in fiscal year 2017, at an average cost of $437 million per month. Since January 2014, the expansion has cost state and federal taxpayers a total of $14.9 billion. Because Kasich so dramatically underestimated enrollment, state costs have already doubled his projections. Federal spending on Ohio’s Medicaid program (including traditional and expansion enrollees) increased by 48 percent from 2013 to this year, while state spending increased by 14 percent.

For the Medicaid expansion’s first three years, Obamacare made federal taxpayers bear all of the benefit costs. The federal share is presently 95 percent, and Obamacare promises it will never drop below 90 percent. Kasich’s legacy and his 2020 presidential hopes depend on that federal match, which has put him at odds with Republicans in Congress and the state legislature.

Also worth noting is that the federal reimbursement is much lower — 63 percent — when it comes to Ohio’s traditional-Medicaid costs, meaning benefits for impoverished families, low-income pregnant women, the disabled, and so on. This mismatch led Kasich to propose reducing eligibility for pregnant women after extending coverage to working-age men with no children and no disabilities.

Concerned about out-of-control costs, eventual federal funding cuts, and the expansion’s perverse incentive for states to cut services for the truly needy, Republicans in the General Assembly passed an enrollment freeze this year. Kasich vetoed the freeze, but lawmakers are considering a veto override.

Congressional Republicans ought to keep Kasich’s record in mind as he warns that the health-care block-grant bill drafted by Senators Lindsey Graham, Bill Cassidy, Dean Heller, and Ron Johnson “eliminates the guardrails that protect some of the most vulnerable among us.” Kasich campaigned on Obamacare repeal and Medicaid block grants during the 2016 presidential race. Now, in preparation for another Republican primary or perhaps an independent run for president, Kasich wants to delay reform with a bipartisan “fix” that would bail out Obamacare’s exchanges, retain its coverage mandates, and leave its Medicaid expansion untouched.

Kasich is clearly frustrated by threats to his legacy at home.

Term-limited next year and with his influence further weakened by Trump supporters’ control of the Ohio Republican party, Kasich is clearly frustrated by threats to his legacy at home. At a recent press conference, Kasich accused Ohio’s legislature of trying to throw away federal funds because “we got some right-wingers somewhere who want to kill this program.”

Of the four Republican candidates to replace Kasich, only Attorney General Mike DeWine has endorsed the Obamacare expansion, though his position changes depending on the audience. Secretary of State Jon Husted is trying to walk a finer line, while Congressman Jim Renacci endorsed the enrollment freeze in a May op-ed and has repeatedly spoken in favor of it since. Even Lieutenant Governor Mary Taylor — Kasich’s second-in-command for the past six years, who didn’t speak up when the governor unilaterally expanded Medicaid in 2013 — promises to reverse his decision.

When weighing their options for governor in 2018, it’s likely that Ohio Republicans will keep in mind their experience with their previous nominee for the office. A professed tea-party candidate, Kasich rode the anti-Obamacare wave of 2010 to victory against incumbent Democrat Ted Strickland. Vowing to apply his experience as House Budget Committee chairman in the ’90s to a projected $8 billion budget deficit, Kasich promptly took on the nursing-home lobby and signed a phase-out of Ohio’s estate tax.

But a bruising $40 million union campaign against a bill to reform public-sector unions prompted Kasich to pivot away from limited government by the end of his first year. By the start of 2013, Kasich was working with the far-left Universal Health Care Action Network to craft messaging for Obamacare’s expansion of Medicaid to able-bodied, working-age adults.

The rest is history — and soon, Kasich’s tenure as governor will be, too.

Jason Hart — Jason Hart is a health- and labor-policy analyst in central Ohio.

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