Medicaid Games in Ohio

Posted by Marc Kilmer in Health Care, Medicaid, Ohio on Apr 20th, 2009 | no responses

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Like many states, Ohio is facing a deficit. Gov. Ted Strickland wants to impose a franchise fee on hospitals and use the proceeds to fund the state's Medicaid program (and, of course, obtain more matching funds from the federal government). House Speaker Mike Budish isn't completely happy with that idea, so he's proposing to expand the franchise fee but then bump up Medicaid reimbursement rates so hospitals don't really feel the impact.

This intra-party squabble (both Strickland and Budish are Democrats) illustrates how dysfunctional the Medicaid system is. The governor made his proposal for little other reason than to get more federal money. But then hospitals screamed about it, so Speaker Budish came up with a convoluted scheme that would draw down these federal dollars and at the same time give more money to hospitals than they are receiving now.

It's a perfect case-study in interest group politics and unintended consequences. Unfortunately, neither of these proposals will actually address the fundamental problems plaguing Ohio's Medicaid system. Nor will either of these plans result in better health care for Ohio's Medicaid recipients. But, hey, when there's "free" federal funding and the chance for higher goverment payments, patients can come later.

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