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Medicaid expansion freeze part of final budget proposals

By JIM SIEGEL Columbus Dispatch Published: July 5, 2017 12:00 AM

Republican state lawmakers want to freeze Medicaid expansion enrollment starting in July 2018, potentially cutting off health-care coverage for hundreds of thousands of low-income adults and likely setting up a veto showdown with Gov. John Kasich.

More than 700,000 Ohioans get health care through the Medicaid expansion, but no new enrollees would be permitted after July 1, 2018, under a provision that's expected to be part of the new two-year state budget.

Those covered by the Medicaid expansion as of that date could continue with coverage, but only if they don't get better employment and drop off the Medicaid rolls -- as happens regularly. The catch is that those who leave Medicaid could not return later even if they lose that job unless they are getting mental health or drug treatment.

However, no one could be added to the Medicaid expansion group starting in July of next year even if they need medical help for mental health of drug use.

The Kasich administration would need to file a waiver to get federal approval for the freeze.

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The freeze is one of more 400 state budget provisions that a joint conference committee will be working out Tuesday night and possibly early Wednesday morning, leading to full House and Senate budget votes on Wednesday afternoon.

Among the other expected resolutions include removing Senate language that soften wind turbine restrictions, removing language related to utility credit ratings and electricity bills, and longer-term help for counties that are losing $209 million in annual Medicaid sales tax revenue.

The expansion freeze would cause hundreds of thousands of poor Ohioans to lose to health coverage and the state to forfeit hundreds of millions of dollars used to fight opioid abuse, according to the Kasich administration.

"When Arizona implemented a similar freeze in 2011, 70 percent of the people who were enrolled when the freeze took effect were not on the program 18 months later. If a similar result occurs in Ohio, more than 500,000 Ohioans could lose coverage," according to a memo from Greg Moody, director of the Governor's Office of Health Transformation.

That estimate may not take into account the exemption for current enrollees with drug or mental health issues.

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The freeze comes as health care uncertainty swirls in Washington, where Republicans could end or significantly alter Medicaid expansion coverage. The federal government currently pays 95 percent of the cost of the expansion.

Some Republicans are concerned about the growing size and cost of Medicaid.

Rep. Andrew Brenner, R-Powell, said if the federal government dropped its share of the expansion to the more typical 60 percent covered for traditional Medicaid, it would cost the state $1.6 billion per year.

Kasich, a big supporter of the Medicaid expansion, could veto the provision before he signs the budget bill on Friday, the final day of the fiscal year. He has pointed to the need to help those "in the shadows" and stresses how much the expansion does to help the mentally ill and drug addicted.

Of the nearly $1 billion Ohio spent on the drug addiction crisis in 2016, Moody noted, an estimated $650 million was paid for by Medicaid for drug addiction and behavioral health services, including $279 million through the expansion.

Senate Republican leaders reportedly are saying they have the votes to override a veto, which takes a three-fifths majority. The House may have the votes as well, but there is less certainty.

Lawmakers also are expected to ask Kasich to get federal permission to help counties and transit authorities that stand to lose more than $200 million a year because they and the state can no longer apply the sales tax to Medicaid managed care services.

Those losses include $12 million annually for Franklin County and about $5 million for the Central Ohio Transit Authority.

Under the proposal, Kasich must seek federal approval to increase the franchise fee on health insurers to provide $207 million annually for six years for counties and transits, ending July 1, 2024. Kasich wants a fee increase large enough to cover the state's loss, but proposed only short-term relief for local governments.

Kasich's budget director has said the governor opposes a permanent replacement of those local dollars, and some wonder if he'll veto this latest proposal.

"It's a little inconsistent for him to say that the counties shouldn't rely on it since they've only had it for six years. It's the same for the state," said Sen. Matt Dolan, R-Chagrin Falls.

Plus, Dolan said, the counties are on the front lines of the opioid crisis, including foster care and coroners.

"This is not a time to walk away from counties," he said. "And public transportation is about creating jobs. If you look at where the jobs are, you need public transportation to get to them."

Dispatch reporter Catherine Candisky contributed to this story.


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