Columbus -- Gov. John Kasich is standing firm on his proposal to expand Medicaid eligibility, but he's also not looking to pick a public fight with another Republican statewide officeholder who opposes the move.
Kasich told audiences in Columbus this week that providing medical, mental health and other services to additional needy Ohioans is the right decision to make, particularly since the bulk of the initial costs will be covered by the federal government.
The stance is different than the position held by state Treasurer Josh Mandel, who this week sent a letter to Statehouse Republicans urging them to abandon Kasich's plan.
"Though the federal government is promising to pay for most of the expansion in the near term, it is currently borrowing approximately 40 cents of every dollar it spends," Mandel wrote. "I am concerned that expanding Medicaid in Ohio will overwhelm an already broken system and place an unbearable burden on generations of Ohioans."
He added, "There is no free money. While expanding Medicaid may direct more federal dollars to Ohio in the next few years, in the long term Ohioans will have to repay the debt that is funding the federal government spending."
Kasich told reporters that his biennial budget proposal includes an exit clause allowing the state to reverse course should the federal government change its funding levels.
"I'm not going to get into a battle with Josh here," the governor told reporters following a speech at the Ohio Newspaper Association annual conference. "He has an opinion about his concern, I think fundamentally about Medicaid. I haven't read the letter, but I think it's about the overall health long-term of Medicaid."
He added, "Is that program going to need to be reformed in the next decade? Yes. But we have an issue today. That's why we have in our proposal that if the federal government starts changing all the rules, we won't continue to be in the program."
Kasich's two-year spending plan would expand Medicaid eligibility to Ohioans earning up to 138 percent of federal poverty level (about $15,400 per person or $23,050 for a family of four).
The administration has estimated that the expansion will leverage billions in federal Medicaid dollars, save the state more than $400 million in general revenue funds and ensure 275,000-plus additional low-income Ohioans will have coverage.
But Kasich's proposal has drawn criticism from conservative groups and concern from some GOP lawmakers, who view it as a support of federal health care mandates and out-of-control spending.
During the Ohio House's finance committee hearing Feb. 14, which focused on the Medicaid portion of the budget, Rep. Robert Sprague, a Republican from Findlay, echoed Mandel's concerns, asking whether the expansion was fiscally responsible.
"The reality is that each one of us in this room is an American as well as a citizen of the state of Ohio," Sprague said. "And the federal government can't afford to pay for the entitlement programs that it already has implemented, so the federal government will be borrowing that $2.4 billion in order to fund this program. We as Americans will eventually have to pay the money back … Clearly this is an unsustainable position for the federal government, and there will be a day of reckoning."
Greg Moody, who heads the state's Office of Health Transformation, acknowledged the concerns about federal spending and debt.
"We're faced with this kind of pragmatic, difficult choice," he said. "Would I rather we take the money and not spend it and draw down the federal debt? Absolutely, but that is not within my range of ability and not within the range of the governor's ability to do. If we don't spend it, it is not as if that money is going to be somehow saved. We are still paying that in our federal taxes. The question is it coming back to Ohio or is it going somewhere else?"
Marc Kovac is the Dix Capital Bureau Chief. Email him at firstname.lastname@example.org or on Twitter at OhioCapitalBlog.