On April 7, Jake Zuckerman from Cleveland.com reported nearly 400,000 Ohioans have lost Medicaid coverage since pandemic-era enrollment rules were rescinded.
We all know the importance of health insurance coverage to a family. Illness or injury can plunge even a financially sound household into dire straits. But for those teetering on the edge of poverty or living in it, insurance coverage is even more important.
But there is another story to policymakers’ choices to restrict health insurance coverage for low-income residents: the lost economic development potential from federal Medicaid money left on the table.
According to the Kaiser Family Foundation, a leading source for health policy research, over two-thirds of Medicaid spending is picked up by the federal government. Kaiser also reports annual state Medicaid spending in Ohio averages over $6,900 per enrollee.
Assuming those who lost their Medicaid coverage are similar to the average enrollee, Ohio lost nearly $1.9 billion of federal dollars from denying Medicaid coverage for these Ohioans.
Let’s put that number in perspective. $1.9 billion is larger than the FY2024 budget for 57 of Ohio’s 61 state agencies, coming only behind the Departments of Medicaid, Education, Higher Education, and Rehabilitation and Correction. This is more money than Ohio spends on 44 different state agencies combined.
What does leaving $1.9 billion of federal funding on the table mean for the economy? It means less dollars going to hospitals and the greater health care system to treat Ohioans struggling with disease and disability. This means not only less resources for our health care system, but also less money in the pockets of nurses, doctors, and administrative staff to spend in the state economy.
This matters for a state like Ohio. Five of Ohio’s top ten employers are in the health industry including its top statewide employer, the Cleveland Clinic, which employs nearly 60,000 Ohioans. Health care is a $59 billion industry in Ohio, making health care 17% more concentrated in Ohio compared to the United States as a whole.
Much of this is driven by Ohio’s aging population. 18.3% of Ohioans are retirement age, higher than the national average and making Ohio older than 31 other states and the District of Columbia. This means Ohio has a greater need for a strong health care industry than the average state.
Beyond the direct economic effects of turning down federal funds for Ohio’s health care industry, there are also dynamic problems that come from reducing investment in health care. Losing out on incentives for preventative screenings can take small problems and make them worse, leading to chronic issues for workers that impact productivity.
Burdens from the cost of health care can cause people to skip out on medication or procedures which can help treat illnesses or conditions that end up hurting them in the workplace.
Legislators and other policymakers have made it clear that they care about Ohio’s workforce and economic vitality. Leaving billions of federal dollars on the table is not the way to do that.
This commentary first appeared in the Ohio Capital Journal.