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Ohio officials may opt out of a costly Medicaid expansion in the wake of the June 28 U.S. Supreme Court decision blocking the federal government from making existing Medicaid funds contingent on broader eligibility rules. Even without opening enrollment to more citizens, Ohio’s Medicaid costs are expected to rise dramatically due to the individual health insurance mandate in President Obama’s Patient Protection and Affordable Care Act, commonly referred to as Obamacare.

Following the Supreme Court ruling on Obamacare, Ohio and other states may now refuse to expand Medicaid eligibility without forgoing current Medicaid funding. In the same call where Lieutenant Governor Mary Taylor — who is also director of the Ohio Department of Insurance — announced the Kasich administration will not implement an Obamacare health insurance exchange, she and state Medicaid director John McCarthy indicated Ohio is unlikely to pursue the Medicaid expansion.

McCarthy said the state expects to spend an additional $369 million on Medicaid in 2014 without expanding eligibility, as an estimated 319,000 currently-eligible Ohioans enroll in Medicaid to escape Obamacare’s individual mandate penalty.

“All of the reforms that we’ve been doing in the last budget, trying to get savings, we haven’t come close to getting $369 million in savings to cover that cost,” McCarthy warned. McCarthy added that by 2018, the state anticipates 440,000 new Medicaid enrollees under current eligibility rules, at a cost of $675 million to the state.

In an interview with Media TrackersIndependent Women’s Forum senior policy analyst Hadley Heath explained the conservative group’s take on the Supreme Court ruling.

“I think the Medicaid expansion ruling was a win for the states,” Heath said, “but only time will tell how that will play out.”

“Additional flexibility for states should come with a greater responsibility for them to find the right solutions that work for their state. Hopefully they’ll embrace reforms that are more like the pilot program in Florida that gives Medicaid beneficiaries a little more personal choice, a little more personal responsibility in their care.”

“Better flexibility should lead more market-friendly states to embrace a better direction for Medicaid, since the federal government seems hesitant to do any Medicaid reform that would actually benefit the people on the program.”

Heath noted that lack of funding will likely prevent the U.S. Department of Health and Human Services (HHS) from implementing state-level exchanges. “It’s not like they just need to go to Ohio and create a federally-run exchange there. What they would have to do, ultimately, if they  were going to abide by what they put into the statute would be to go into many states and create the federal exchanges there — and they simply don’t have the money.”

State health insurance exchanges, whether managed by the states or by HHS, are the intended avenue for uninsured citizens currently eligible for Medicaid to enter the system. Obamacare does not include funding for HHS to implement state exchanges. As of publication the federal government is more than $15.8 trillion in debt, and House Republicans oppose any further Obamacare spending.

Conservative policy experts appear to be unanimous on the need for state officials to minimize Obamacare’s reach into their states. Reacting to the Supreme Court decision, Michael F. Cannon of the Cato Institute wrote at National Review Online, “The silver lining to this ruling is that states have the power to block all of Obamacare’s new Medicaid funding, in addition to the employer mandate (tax!) and subsidies for private health-insurance companies.”

The Heritage Foundation described the Medicaid ruling as “helpful in limiting Congress’s power to bribe states into submission or to threaten them with the loss of federal revenue in a long-run federal-state program.”

Peter Suderman of the libertarian magazine Reason opined, “thanks to the court’s Medicaid ruling, we may end up with many states in which ObamaCare is essentially not implemented — a piecemeal, state-by-state version of ObamaCare in which some states exist substantially outside the law’s reach.”