by Sarah Jane Tribble for

February 4, 2013

CLEVELAND, Ohio -- Saying that an expansion of Medicaid will help some of the poorest Ohioans, Gov. John Kasich included the much-anticipated announcement in his two-year budget proposal Monday.

The move makes Ohio one of a growing number of Republican-led states to fulfill an option under the federal Patient Protection and Affordable Care Act to expand Medicaid to those who earn up to 138 percent of the federal poverty level.

Kasich made no secret Monday that he wasn't a fan of the increase in federal programs or federal health care reform, saying that this was a decision that I had to consider over a long period of time. Still, he said, the contribution of federal dollars for extending Medicaid benefits makes great sense for the state of Ohio."

Ohio will realize a net increase of 275,000 new Medicaid enrollees after the expansion, according to state officials. At the same time, the state will see a net gain of $235 million over the two-year budget time period if it accepts federal dollars to pay for the program growth.

Greg Moody, Ohio's director of the Office of Health Transformation and one of Kasich's top staff members, explained in an interview with The Plain Dealer that âat the end of the day there is a group of folks who get care in the wrong place, we end up paying for that in more expensive ways as a community. This is an opportunity to take care of that in a responsible way.

The proposed two-year budget must still pass the state legislature later this year. Politicians, patient advocacy groups and others rushed to release statements supporting the budget announcement Monday afternoon.

Joe Roman, president and chief executive of the Greater Cleveland Partnership, a regional chamber of commerce, said Ohio would face "undue financial harm if we don't expand Medicaid."

Greater Cleveland Congregations, a coalition of 40 religious groups and the lead organizer of the Northeast Ohio Medicaid Expansion Coalition, pledged Monday to "do our part to make sure Ohio legislators understand that expanding Medicaid will keep Ohioans' tax dollars here in our state, working to help our economy, our health and our state budget."

Kasich emphasized that the  extension of the program would be largely paid for by the federal government, which will cover 100 percent of the cost of newly eligible enrollees for three years before reducing that support to 90 percent in future years.

The governor warned that if the federal government failed to keep up that level of contribution, Ohio could pull out of the expansion.

Stan Dorn, a senior fellow at the non-partisan Urban Institute Health Policy Center in Washington, D.C., said Monday that the federal government's money makes the expansion difficult to turn down.

"From a practical perspective, it's just a no-brainer for most states but thereâs an ideology that says we donât want to cooperate with Obamacare no matter what,â Dorn said. âThe question has always been how are state policymakers going to consider the practical benefits to their people."

Last month, the Urban Institute, along with The Ohio State University and others, released a study calculating that the expansion could mean a $1.4 billion net gain for Ohio's budget by 2022. They estimated that a total of 456,00 residents would be added to Medicaid's ranks during that time.

And while the estimates differ from those Kasichâs administration released Monday, the theme was the same: More money coming into the state will mean more people with insurance and more dollars being spent in Ohio.

Kasich's budget also calculates some positive economic impact from the proposed extension. With more people covered by Medicaid, overall counties will save $130 million as, for example, they no longer have to pay for services such as behavioral health.

Moody said that the proposed extension of Medicaid comes as part of the ongoing development of Ohio's Medicaid program, which his office has been transforming for the past two years.

The budget also designates Medicaid as its own cabinet-level department to "remove barriers that impede innovation," according to a press release.

As with the budget presented in March 2011, which laid out a plan to "consolidate and improve" the Medicaid program, Monday's announcement included plans to coordinate workforce programs and target programs for children, such as reducing infant mortality and early childhood education.

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