The rivalry between Ohio and Michigan on the football gridiron is legendary, dating back 120 years. Now that both states are commonly aggregated together as so-called Rust Belt states, the rivalry extends to other areas like manufacturing, tech development and how once great but now aging metropolises like Detroit or Cleveland transition to the 21st century.
With the exodus of manufacturing jobs from trade deals like the North American Free Trade Agreement taking a toll on both states, whose prowess in auto manufacturing and related supply-chain companies made them destination states during the first half of the 20th century, federal and state social safety net programs play key roles in helping workers and their families maintain a quality of life that has more and more come under attack as Republican leaders try to have their way with Social Security, Medicare and Medicaid.
In Ohio, GOP lawmakers didn’t want to accept the expansion of Medicaid under the Affordable Care Act, after Chief Justice John Roberts made it an option for states when the high court ruled Obamacare constitutional. Gov. John Kasich portrays himself as a social and fiscal conservative, but when he saw the carrot of $2.5 billion in federal funds dangled in front of him, he couldn’t resist the offer, saying if Ohio didn’t take the money, it would go to another state. As a regular railer against Washington spending, and calls for the impossible dream of a federal balanced budget amendment, Gov. Kasich did an administrative end-run around his otherwise friendly legislature and put Ohio among the 19 states that accepted Medicaid expansion.
In Ohio’s rival to the north, Michigan’s Republican Gov. Rich Snyder, one of the brood of Kasich-like conservatives who were came to power in the class of 2010 Tea Party-inspired candidates, also took the federal money that came with Medicaid expansion. Both Snyder and Kasich are now term-limited, but they still like the bounty of cash DC gives sends them, that has helped drive job creation and provided a stream of revenue they’ve used to achieve their own political goals.
Gov. Kasich’s Office of Health Transformation has weighed-in on the benefits of expanding Medicaid, so much so that their reports read as if President Barack Obama had written them himself. Now, with the ascension of Donald Trump to president and a Republican Congress all too ready to repeal and replace the ACA with a program yet to be announced, the benefits to both state’s economies could vanish soon, as the U.S. House and Senate forge forward with speed to erase the nation’s six-year old healthcare law.
Reports on the negative impact on state economies from eliminating Obamacare, and by extension Medicaid expansion, are coming in, and they paint a somber picture at best and a dark one at worst. Ohio stands to lose 126,000 jobs by 2019, according to one respected report.
Making a case that Medicaid expansion pays for itself, the Institute for Social Research at the University of Michigan says “Michigan’s expansion of Medicaid health insurance coverage has boosted the state’s economy and budget, and will continue to do so for at least the next five years.” John Z. Ayanian, M.D., M.P.P., lead author of the new study and director of the U-M Institute for Healthcare Policy and Innovation, said, “The economic impact of Medicaid expansion extends well beyond health care providers and the wallets of those who formerly had no insurance. We hope that our findings will provide needed evidence to Michigan lawmakers as they consider the future of the program, as well as informing decisions about Medicaid expansion in other states.”
The total economic impact from expanding Medicaid will generate more than enough funds for the state budget to cover the cost of the program in the current fiscal year, the researchers reported. Moreover, this “self-paying effect” will continue over the next five years, even as the state’s share of its cost increases every year until fiscal 2021 under federal law. Michigan will “end up with more money in its coffers because of the program than it actually spends on the program,” Mr. Ayanian notes.
Other benefits to Michigan from expanding Medicaid were culled out as follows:
- The ripple effects generate more than 30,000 new jobs every year – one-third of them in health care and 85 percent in the private sector.
- The jobs yield about $2.3 billion more in personal spending power each year for Michigan residents.
- The new jobs and related personal spending are generating approximately $150 million in income and sales tax revenue annually for the state.
- The state will continue to save money it would have spent on other safety net programs if Medicaid had not expanded.
- For 2017, the economic impact of expansion means the state will finish with $432 million more than its share of the program’s cost, because of new tax revenue and avoided spending.
- In 2021, the state will end up with $162 million more than its share of the cost.
- Michigan spends $20 million to administer the program, but it saves $235 million a year on selected health services that it previously funded but are now covered through the Healthy Michigan Plan.
- Personal spending per person for previously uninsured Michiganders increases about $490 on average.
If Buckeye leaders can look beyond what happens on the football field from year to year, they just might find that Wolverines are on the right track.
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