Budget questions looming for Ohio

Ohio Gov. John Kasich (Photo by Chip Somodevilla/Getty Images)
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Ohio Gov. John Kasich (Photo by Chip Somodevilla/Getty Images)

As the administration of Gov. John Kasich plans the upcoming two-year state budget, officials face two looming questions: will the eight-year economic expansion end and will Congress pull the plug on funding to states for expanded Medicaid, which is a key element of Obamacare?

Ohio Budget Director Tim Keen said economic expansions don’t last forever and the state has already missed targets for income and sales tax revenues this year, indicating a possible softening in the economy. If the sluggish economic expansion lasts another two years, it’ll be the longest expansion in the post war era, he said.

“We had a dip in the economy, we had a slow patch,” Keen said. “It shows in wage and salary income.”

President-elect Donald Trump also promised to repeal and replace the Affordable Care Act, also known as Obamacare, and Republican leaders in Congress have already indicated an eagerness to do so. Dismantling Obamacare may happen at the same time that Ohio is building its upcoming budget.

In 2013, Kasich expanded Medicaid under Obamacare to cover more low-income Ohioans and bring in more funding for mental health and drug addiction services. As a result, nearly 700,000 more Ohioans are now covered under Medicaid. Since Obamacare was put in place, Ohio’s uninsured rate dropped from 12.3 percent in 2010, or about 1.4 million people, to 6.5 percent in 2015, or 746,000 people.

Medicaid is a state and federally funded program that covers 3 million low income and disabled Ohioans. The feds typically pick up 60 percent of the cost but covers 100 percent for those currently enrolled under the expansion, though that enhanced match drops to 95 percent next year.

State Rep. Ryan Smith, R-Bidwell, said Ohio cannot sustain expanded Medicaid without the federal money that comes with it.

Keen said he doesn’t know what will happen if Congress dismantles Obamacare. “I do not know. Repeal and replace. What is the replace?” he said.

State Sen. Mike Skindell, D-Lakewood, said Congress may change Medicaid to a block grant program – where states get chunks of money and authority to decide how to best spend it on health care for the poor. But no one has a clue about how much money Ohio would receive or what kind of restrictions might come with it, he said.

Keen said “We would take a ‘per member per month’ block grant if appropriately set up and if it gives us the flexibility to better manage our program. That’s what a lot of the Republicans are talking about. The devil is in the details.”

The Kasich administration is expected to unveil its 2-year state budget proposal at the end of January. All told, the budget is about $60 billion a year, of which $25 billion is Medicaid.

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