A poll released Thursday, May 1 showed 76% of Americans oppose cuts to Medicaid. (Photo via Getty Images)
Ohio is among five states whose economies will be most harmed if huge proposed Medicaid cuts become reality, the Commonwealth Fund said in an explainer this week.
Medicaid, the federal-state health insurer for low-income Americans, covers nearly 3 million Ohioans. That’s about a quarter of the state’s population.
Particularly in states such as Ohio, Medicaid covers large numbers of working people. That’s because in 2014 the state opted to expand eligibility to people making 138% or less of federal poverty guidelines. For a family of four, that’s $43,000 a year.
SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
About 770,000 Ohioans are covered by expanded Medicaid — a group for which rates of uninsurance have dropped by 62% since 2012, according to the Health Policy Institute of Ohio.
A draft budget making its way through the U.S. House of Representatives would cut federal spending — the primary source of Medicaid money — by $880 billion over 10 years. KFF reported that such a move would require a 29% increase in state spending to maintain the same level of coverage.
The federal government currently covers 90% of the cost of Ohio’s expended Medicaid. In his draft of the state budget, Gov. Mike DeWine included a provision saying that if the feds cut that, the state would end coverage of the 770,000 Ohioans in the expansion group.
In the report it released this week, the Commonwealth Fund said such cuts would harm state economies, with Ohio’s high among them. It said “the country’s gross domestic product (GDP) would decrease by $95 billion and tax revenue would decrease by $7 billion. The states likely to face the most significant economic losses include California, New York, Texas, Pennsylvania, and Ohio.”
One reason for the losses, the explainer said, is that each dollar in Medicaid spending creates a greater value to the overall economy.
“Medicaid investment is shown to have a “multiplier effect,” meaning that every dollar spent generates over a dollar’s worth of economic activity,” it said. “Medicaid drives employment in the health care sector; generates state and local tax revenue; and saves money for enrollees, allowing them to spend more on items other than health care.”
Medicaid spending also bolsters the economy by making more people healthy enough to work. Research in Ohio and across the country has shown that workforce participation is greater in states that expanded Medicaid, the Georgetown University McCourt School of Public Policy reported in 2023.
The economic benefits of Medicaid spending are manifold, the Commonwealth Fund report said.
“Medicaid coverage helps lift enrollees out of poverty — more effectively, in fact, than federal tax credits,” it said. “In states that have expanded Medicaid, enrollees have benefited from reductions in income inequality, evictions, and bankruptcies, as well as improvements in credit scores. One study found that less than two years after Michigan expanded Medicaid, the average amount of medical bills in collections for enrollees had dropped by over $500, enrollees were 11% less likely to be evicted, and they were 13% less likely to overdraw their credit cards than before expansion.”