Kasich finesses expense of Medicaid expansion for dubious party

(Bloomberg) — 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 Gov. 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.

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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 the Patient Protection and Affordable Care Act of 2010 (PPACA), 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, Calif.

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.