Medicaid Costs Not as Promised

Taxpayers’ hackles ought to go up every time they hear politicians pledging some new program “won’t cost us anything.” For West Virginians and Ohioans who were promised the federal government would cover the entire cost of expanding Medicaid programs, it turns out that isn’t exactly true.

A key to President Barack Obama’s signature health care law is expansion of Medicaid programs by the states. Although officials in many states refused to go along, West Virginia and Ohio did.

Medicaid is a complex program, funded partly by the states and partly by the federal government. West Virginia’s 28.65 percent share of the program costs state taxpayers about $815 million a year. In Ohio, the state-funded percentage is 37.36, costing about $6.1 billion a year.

Included in Obamacare is a mandate that states expand Medicaid eligibility. The law allows people to qualify for the program with higher incomes than in the past.

To make that more palatable to officials in the states, the federal government will pay the entire cost for newly eligible Medicaid enrollees through 2016. After that, the states’ shares will be just 10 percent.

But go back and re-read the preceding paragraph. Until 2016, Medicaid costs will be covered only for enrollees who are newly eligible for the program. The cost for new enrollees who were eligible previously is not included. States have to cover the cost for them at the normal percentages.

In both West Virginia and Ohio, tens of thousands of people who have signed up for Medicaid for the first time fall into that category.

One estimate is that about 60,000 new Medicaid enrollees in Ohio fall under the old law, meaning the state will have to cover 37.36 percent of the cost of benefits.

Although we have not seen a similar estimate for West Virginia, the number of new enrollees under the old law probably exceeds 12,000. State taxpayers will have to pay 28.65 percent of their benefits.

Government spending initiatives are full of unintended consequences. The Medicaid situation – adding tens of millions of dollars to program costs for West Virginia and Ohio taxpayers – is one we doubt governors and legislators anticipated.

Now, however, we are stuck with the new drains on already strapped budgets in our states. It will be up to our governors and legislators – our taxpayers, really – to find a way out of this new mess created in Washington.