State spends fewer Medicaid dollars

Associated Press

COLUMBUS

Ohio has spent fewer dollars on Medicaid than expected under its current two-year budget.

State officials have been working to rein in the cost of the $19.8 billion health program for low-income people. The slowdown in spending comes as Gov. John Kasich prepares to unveil his next two-year spending blueprint in February.

In the budget year that ended in June, state figures show that Ohio spent $590 million less in state and federal dollars than it had anticipated.

Medicaid spending for the current fiscal year also is tracking below projections. The state has spent about $6.2 billion on Medicaid since July. That’s about $219 million — or 3 percent less — than it is expected to spend through November, according to the latest data available.

Ohio Medicaid Director John McCarthy credited the slowdown to changes in provider reimbursements, more conservative budgeting and better contract negotiations. He also said a new system for processing claims has meant that the state is better at rejecting claims that should have been paid by Medicare or those that don’t fit Medicaid rules.

Still, he noted that though the savings seem significant, they’re still just a fraction of the federal-state program’s cost.

Medicaid spending accounts for roughly a third of all funds Ohio gets from state and federal dollars, fees and other sources.

“The better job we do now of getting control of the program and expenditures, it helps us going into the next budget,” McCarthy said. He said the slowdown in spending allows officials to look at what investments or changes they want to make to the program.

Medicaid’s growth rate is among the factors state officials are watching as they decide in the coming year whether to expand Medicaid under President Barack Obama’s health-care law.

The state’s cost-wary officials are assessing the long-term impact of expanding Medicaid. And McCarthy said the administration is following closely discussions about the “fiscal cliff” in Washington, fearing that a possible deal to avoid the tax increases and spending cuts could include pushing more of the cost of the Medicaid program toward states.

The state is bracing for hundreds of thousands of eligible Ohioans to sign up for Medicaid once the federal law requires most people to have health insurance.

Ohio officials estimate there will be a roughly $700 million increase in the cost of the program in 2014 and 2015, as 319,000 new people come onto the rolls.

Kasich, a Republican, has said he plans to make known his decision on whether to expand Medicaid when he releases his next budget.

Under the law, the federal government will cover 100 percent of the cost of the first three years of the expansion, gradually phasing down to a 90 percent share — still a far more generous match than states traditionally have received. The expansion is expected to provide coverage to about half the 30 million uninsured people nationwide who will benefit from the law.

Under the health-care law, Medicaid would be expanded Jan. 1, 2014, to cover people making up to 138 percent of the federal poverty line, or about $15,400 a year for an individual.

Medicaid currently covers roughly 2.3 million low-income and disabled people in Ohio.