Ohio conservatives are demanding the the Ohio House spend $1 billion in the biennium to deny the Medicaid expansion on the grounds that it increases the federal deficit.  You know what else increases the federal deficit?  Not expanding Medicaid in Ohio.

The federal government will spend around $1.3B annually to expand Medicaid coverage in Ohio.  Without expansion, the there will still be another $0.9B in federal spending, as detailed below.

The proposal, then, is to reduce the federal deficit by $400 million while throwing the Ohio budget $500 million out of balance.

This is a strange thing to worry about.  Ohioans will pay the same federal taxes regardless of whether we expand Medicaid.  The new taxes in Obamacare aren’t indexed to the spending in Obamacare; we’ll just be paying taxes and getting nothing.  If “relative federal deficit reduction through tax increases” is a goal unto itself, the Ohio’s state legislators ought to run for Congress!  They’d beat our federal delegation handily.

As we’ve discussed before, providing Medicaid coverage is much less costly than providing subsidized private coverage through the health exchange i.e. the federal subsidy on the Exchange is greater than federal Medicaid spending.  This is true for Ohioans below 218% of poverty.  Without the Medicaid expansion, the 197,100 uninsured Ohioans earning between 100-138% of poverty will get a subsidy of $4600-$5000 per person.  Let’s assume that the population is evenly distributed, and the average subsidy will be $4800.

This means new federal spending on exchange subsidies will be $859,680,000 if Medicaid isn’t expanded.

It’s also worth mentioning that estimates show expanding Medicaid will create 27,000 health care jobs.  These are jobs that will pay federal income and FICA taxes.  This is because the newly insured will go to the doctor more often, and more people will be able to earn a living in the health care sector.  If people don’t go to the doctor more often, then federal Medicaid spending will be lower.

Let’s assume that the distribution of high-wage and low-wage jobs created is the same as in this forecast published in 2011 by the Kasich administration, with 61% of the jobs going to practitioners and 39% to support.

New hires Average salary Income tax collection FICA collection
Practitioners 12,217 $66,000 7.9% 12.4%
Support 7746 $25,000 0% 12.4%

This means the federal government may stand to lose $55,940,000 in income taxes and another $124,300,000 in FICA taxes if these new health care jobs aren’t created – or over $180 Million in federal revenue.


  • dmoore2222

    Republicans have always had problems with the math. It’s one of those fact things, like their bogus polling on presidential election night, they just don’t seem to be able to reckon with. Another would be putting the profitable Ohio Turnpike over a billion in debt for short term gain.

  • Natasha

    ‘Fiscal Conservative” – my ass. These Republicans are about as fiscally conservative as college bimbos are modest in a ‘Girls Gone Wild’ spring break video.

    Recently the Dispatch’s editorial thugs were crowing about State Rep Brenner, (R) Powell, Delaware County, who has aligned Jesus with the GOP destruction of the middle class and savaging of the less fortunate in Ohio.

    ” … State Rep.Andrew O. Brenner hopes “to re-spark the conversation about stopping Medicaid expansion in Ohio.” The Powell Republican wrote a column for his wife’s blog ripping churches that support adding 275,000 Ohioans with no health insurance to the Medicaid rolls. “If government is the church’s solution for helping the needy, why do we need churches? If government is the solution, why should I take the time to go to church and donate money to the poor, when all I have to do is have the government take money out of my paycheck and redistribute it to the poor?” He added: “Would Jesus say, I should not personally take on poverty, I should rely on others to fix poverty? I should not try to work hard, build up a business, hire people and help them to help themselves, but instead I think everyone should be given a free handout?” … ”

    Of course the Dispatch fails to mention that Brenner (As The VP of Prestige Music Studios) and his wife, a Powell city council member, ran Prestige for almost two years without paying the employer taxes that they withheld from their employees – more than $70,000. It happened concurrently with Brenner’s campaign for his second term in the O-HoR.

    The I.R.S calls that “stealing” from the employees and a Federal judge last week sentenced a Franklin County man to prison for similar tax evasive schemes – not paying the taxes he withheld from his employees, among other things.

    The Brenners are part of the Delaware Republican crew who routinely disregards their personal and business tax obligations, e.g., Clerk of Courts Antonoplos who has more than $304,000 in tax liens against her since 2004, and State Auditor Yost who got himself an Ohio tax lien when he was Delaware County Auditor.

    Fiscally Irresponsible is a better way to describe these clowns who are very good at snaking public money to campaign donors while disregarding the financial obligations they impose on us. To answer Brenner; I think Jesus would condemn these Ohio GOP jackwads much like did to the Scribes and Pharisees back in the day.

  • The “conservative” solution — we can spend more and do it more stupidly than those hated Feds. Who cares about people without health insurance. Let’s — I don’t know — raise sales taxes so we can screw poor people twice over. More money for taxes, less for the hated Federal health insurance.

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