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Exclusive: How Ohio’s Republican governor sold the state on expanding Medicaid

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Hoping to bring billions in federal funding to his state while shielding himself from the political pain of complying with Obamacare, Ohio Gov. John Kasich has spent the past few months reaching out to some odd allies that would support the Medicaid expansion.

The Republican administration worked shoulder to shoulder with Obamacare supporters and opponents, crafting a lobbying campaign aimed at making a key portion of the health overhaul more palatable to businesses and legislators.

“We knew for the extension to even be a possibility, there needed to be a better understanding of it,” Kasich communications director Scott Milburn says. “That case needed to be made by stakeholders on the front lines. Once they got going, it became a persuasive argument. Their ongoing partnership on this is highly valued.”

Kasich announced Monday the result of that partnership: He supports the Medicaid expansion, a decision that could expand Obamacare to cover as many as 684,000 Ohioans, according to an Urban Institute analysis (Kasich's office puts the estimate at 275,000).

Kasich was the fifth Republican governor to sign on, and some see his decision, within weeks of Arizona Gov. Jan Brewer’s, as a tipping point. Michigan Gov. Rick Snyder announced Wednesday that he too supports the Medicaid expansion, becoming the sixth Republican governor to do so. Overall, 24 states have signed onto the program.

"Certainly they're giving other governors cover," says Bill Pierce, a senior vice president at APCO Worldwide, who worked at Health and Human Services during the George W. Bush administration. "You've now got a real conservative state, a battleground state and a blue state all signed up. If you're a Republican governor thinking about this, you fit into one of those categories."

The Medicaid expansion still remains a tough sell among conservatives, who argue that the expansion enables the Obama administration to expand an unsustainable entitlement program. The Wall Street Journal’s editorial board recently described Brewer and Kasich as “Obamacare Flippers” who accepted “Mr. Obama’s Medicaid bribe.”

The inside story of how Kasich came to back the Obamacare program involves an unlikely-bedfellows coalition of Obamacare supporters and opponents, who saw the Medicaid extension as sound economic policy — and, in tandem, took that message to businesses and legislators.

The Kasich administration has made no secret of its opposition to Obamacare. It declined to set up a state-based health exchange, saying he would not “spend Ohioans’ money on something I can’t determine.”

The calculus on Medicaid, though, was a bit trickier. Ohio has 1.5 million uninsured residents, about 14 percent of the state population. Those individuals have to find health care somewhere: The Ohio Hospital Association estimates that it spent $2.5 billion on uncompensated care in 2009, the most recent year for which data is available.

The Medicaid expansion could change that. It would, according to an Urban Institute analysis, cover 684,000 Ohioans, with the federal government covering all costs for the first three years (and at least 90 percent afterwards).

An analysis from the Ohio Health Policy Institute found that the expansion could bring in over $5 billion in federal dollars by 2022, according to one analysis, while only requiring $609 million in state spending.

"Ohio has already said no to a state exchange and no to federal takeovers of insurance regulation and Medicaid eligibility," Kasich spokesman Milburn says. "This is another no—to a $13 billion grab by Uncle Sam of Ohioans’ federal tax dollars, Obamacare’s rural hospital closures and its even higher health insurance premiums."

The governor’s office began its outreach effort after President Obama’s reelection. While Kasich had not committed to expanding Medicaid, he wanted to at least keep that option on the table.

To do that, the governor’s office reached out to stakeholders and asked them to do some of the heavy lifting: Making the economic case for enabling a major part of the law.

“We urged them ... to make the case for preserving this as an option in Ohio,” spokesman Milburn says.

Rather than having to convince the governor, Obamacare supporters were asked to focus their efforts on convincing businesses and legislators.

“The governor’s office said that, if this is going to happen, I need to see that I’m not going to get creamed by the legislature. So it was very clear what we had to do," says Cathy Levine, executive director of the Universal Health Care Action Network, which supports the health-care law.

Levine recalls her group working on an economic analysis of the Medicaid expansion, one that would eventually be published in conjunction with the Ohio Health Policy Institute. In that process, she was in regular contact with the governors’ office, sharing different budget assumptions, as to ensure they would all land near the same place.

“The administration was totally transparent about how they were developing their numbers and analysis,” Levine says. “We went back and forth so we could try to close those differences. They worked very hard on their end on an honest analysis of those numbers.”

On the ground, a new group called the Ohio Alliance for Health Transformation sprang up, which oversaw seven regional coalitions all advocating for the Medicaid expansion.

“The organizations responded to the governor’s leadership on this, as far as saying, let’s define what this means for Ohio and create the right environment,” says Jenny Camper, who worked as a communications consultant for the Northeast Ohio Medicaid Expansion Coalition, part of this umbrella organization.

Camper says the group lobbied state legislators and held rallies — one at a Baptist church in in Northeast Ohio drew over 1,000 supporters — to demonstrate the groundswell of public support. Each local coalition hosted a day at the state capitol, where they would meet with legislators and make the case for extending Medicaid.

“Clearly, they [Kasich’s office] could see it happening as it played out in the newspapers and through social media,” Camper says. “We were able to just give them updates on different organizations that had been approached, especially the Chamber [of Commerce] groups.”

Around the state, other efforts were  underway. The Ohio Hospital Association decided at a board retreat in August that it would support the Medicaid expansion.

“Within the last month or so, that’s when you saw a lot of newspaper editorial boards backing this and a big groundswell,” government affairs director Jonathan Archey says. “There’s definitely been a lot of good dialogue and working with the administration on this.”

Medicaid expansion supporters say that they did not know for sure whether Kasich would back the idea until the public release of his budget  Monday. Now, their efforts will focus on the Republican-controlled legislature, which will have the final say on whether the governor’s budget moves forward.

“We fully expect that there are going to be some legislators that are going to require some education,” says Camper. “We’re going to have to do our best to answer their questions.”

KLIFF NOTES: Today’s top health policy reads from around the Web:

Obamacare is forcing insurers to cater to individual customers. "Insurance companies across the country, whether national profit-making players like WellPoint and UnitedHealth Group or nonprofit Blue Cross plans in states like Arizona and Michigan, are undergoing radical change as a result. After years of focusing on selling plans to employers, rather than individual consumers, the insurers must alter course." Reed Abelson in the New York Times.

Utah  retreats on running a health exchange. "Utah is now proposing to keep and run Avenue H as a 'shop' exchange for small businesses, relinquishing to federal officials the task of building a separate marketplace for individuals." Kristen Stewart in the Salt Lake Tribune. 

Arizona Gov. Jan Brewer is trying to drum up support for expanding Medicaid. "Gov. Jan Brewer’s administration has launched two Web sites to garner public support for her proposal to expand Medicaid and insure more low-income Arizonans. The Web sites are part of a sweeping effort by Brewer, health-care providers and the business community to win support from Republican lawmakers, in this case by going straight to their constituents." Mary K. Reinhart in the Arizona Republic.