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Ohio blazing trail on healthcare reform

June 30, 2017

Ohio is a bellwether state — it has always has been. So as the U.S. Senate grapples with health care reform legislation and the lingering legacy of ObamaCare, senators would be well-advised to pay attention to the bold health care initiatives that Ohio’s General Assembly just passed.

After Ohio Governor John Kasich unilaterally expanded Ohio’s Medicaid program in 2013, the state’s Medicaid rolls have since ballooned by more than 700,000 people — 40 percent more than originally projected. The pac-man of virtually every state’s budget continues to devour ever-larger chunks of the state’s resources and has pushed Ohio’s own budget to the brink.

 

Like many other states across the country, Ohio lawmakers have had enough. Emboldened by the Trump Administration’s professed willingness to extend states flexibility on health care and rejoin them at the bargaining table, Ohio will soon be sending Washington Medicaid and state innovation waiver requests designed to curb Medicaid expansion and cut cost overruns.

Ohio’s trial balloon will be watched carefully as other states consider their own waivers to help rein-in runaway Medicaid costs and protect their insurance markets.

The state’s General Assembly has just insisted that Governor Kasich submit two significant waiver requests to Trump’s Administration by early next year. The waivers will reduce Ohio’s Medicaid costs and create a more-seamless transition for people moving from Medicaid into affordable private coverage — something vitally important given the current death spiral of Obamacare exchanges.

First, the Healthy Ohio program will reduce Medicaid costs and help recipients obtain private coverage. Building on the foundation of Healthy Indiana, Healthy Ohio will require non-disabled Medicaid recipients to contribute to a health savings account, or HSA, and earn rewards for embracing healthier lifestyle choices.

Medicaid recipients who do not pay into a HSA within 60 days will lose coverage until they make the appropriate payment. The Healthy Ohio program will reinforce personal responsibility for medical care and help those with limited histories of receiving coverage acclimate to private health insurance markets.

The second waiver, known as a state innovation or 1332 waiver, will ask Washington to waive several costly burdens imposed by Obama-era regulations, including the unpopular individual mandate and many of the coverage mandates forced on consumers participating in Obamacare exchanges.

The U.S. Senate’s healthcare bill appears poised to expand the use of 1332 waivers — and that’s a good sign. As someone once said, elections have consequences, and with Trump in town Ohio and several other states stand ready to return their health insurance markets to more competitive, cost-effective days.

In addition to insisting on seeking greater flexibility from Washington, the Ohio Senate and conservatives in the Ohio House won a hard-fought budget battle and managed to freeze the state’s expanded Medicaid population.

Individuals already enrolled in the expanded population may remain in the program, but as of July 1, 2018, Ohio will not cover the expanded Medicaid population created under the Obamacare framework. Such a freeze will gradually reduce caseloads and focus Medicaid dollars on the most needy — and Ohio Senators especially, who stood their ground fighting for these reforms, deserve applause and appreciation for their efforts.

As long as Governor Kasich does not misguidedly veto the Assembly’s significant achievements, Ohio will blaze a trail for other states to follow as they try to regain control of their healthcare and insurance markets. And once again, as Ohio goes, so goes the nation.

Rea S. Hederman Jr. is executive vice president and chief operating officer of The Buckeye Institute, a think tank promoting free market principles, and is an expert in healthcare policy.

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