Hold Medicaid Spending Down

Ohio has enjoyed some success in limiting the growth of spending for the Medicaid program. That should not be taken as an indication the state can continue to control Medicaid costs enough to afford the major enrollment expansion sought by the federal government, however.

Thus far during the fiscal year that began July 1, spending for Ohio’s Medicaid program is up 2 percent from last year’s rates. That is about $121 million less than had been predicted.

About 250,000 more people have been added to the program since last year, so the state’s cost-control program is good news. Still, Medicaid, funded jointly by the state and federal governments, is a gigantic drain on Ohio’s budget. To date this fiscal year, about $5 billion has been spent on the program.

State officials credit various reforms with reducing Medicaid spending. More tight control over rates for managed-care programs is one factor.

But less increase than expected in use of some Medicaid programs also plays a part. For example, costs for Ohio’s PASSPORT program, providing in-home care for some Medicaid clients, are much lower than expected because enrollment was not as high as predicted.

Ohio’s experience is far from unusual, according to a study by the Kaiser Family Foundation.

Medicaid spending nationwide has increased by only about 2 percent this year, according to the foundation. Less enrollment than had been expected in many states receives the credit, Kaiser analysts explained.

Again, success in holding down increases in Medicaid spending may tempt some state officials to go along with the major expansion of the program envisioned under the new national health care law. If Ohio goes along with that, it would add about 680,000 people to the state’s Medicaid rolls.

Ohio, still struggling to keep its budget in balance, simply cannot afford to pay for an increase of that magnitude.

State officials still have not decided how to reply to the U.S. Department of Health and Human Services on whether Ohio will expand its Medicaid program. As matters stand, even with some small success in controlling Medicaid spending, there is no reason for optimism about the affordability of an expanded program.