Ohio’s Medicaid Program Remains Largest State Expenditures in DeWine Operating Budget Proposal

Ohio’s newest budget proposal brings with it the continued focus on one of the largest state expenditures, the Ohio Medicaid program. Medicaid is a joint federal-state program that provides health care insurance to the poor. Medicaid has become a hot political topic recently with the expansion of Medicaid services provided primarily through federal government funding under the Affordable Care Act aka Obamacare. With the recent approval of Ohio’s waiver to impose work requirements on able-bodied individuals who are served by the expansion of Medicaid through the Affordable Care Act, Medicaid funding and particularly the increased state share for programs will continue to make this state program an area of focus.

Governor DeWine campaigned on policies that bring increase personal responsibility to the Medicaid program and the approval of the work requirement is the first of what is likely a number of policy proposals dealing with this issue.

In January, the Governor ordered the Director of Medicaid to begin the process of issuing a new RFP or request for proposal for the state’s managed care contracts. The cost of services provided by Medicaid and the use of managed care to control those cost is a continued debate at the Statehouse and this budget cycle won’t be any different.

One topic that has been of interest as of late is the cost of prescription drugs and the use by the managed care plans of pharmacy benefit managers or PBMs. The role of PBMs in Ohio and nationally in other states is an issue that has been debated for almost a year now in Ohio and the administration as well as the General Assembly is sure to continue the debate as they move through budget deliberations.

The newly introduced budget language in House Bill 166 does provide a few changes to the Medicaid Program. Among the policy changes that are sure to spur a lot of debate is the elimination of a set rate increase for nursing facilities. This provision was subject to a veto override in the last General Assembly. Another change is the department is eliminating the ability for managed care plans to have separate formulary list for prescription drugs. The department has proposed having a single preferred drug list or PDL moving forward.

Another new section of proposed law would allow Medicaid to suspend a provider’s agreement to provide services for Medicaid if the Department determines the provider presents a danger of immediate or serious harm to the health, safety, or welfare of Medicaid recipients. Language dealing with the suspension of a provider who commits fraud is included as well.

This area of the budget is positioned to be hotly debated in the coming months. In past year the Ohio General Assembly has shown a desire to have more say in how what amounts to 1/3 of all state spending is administered and this budget cycle is likely shaping up to be similar to past years.

You can find more information on Ohio’s budget by visiting these links: