Lawmakers Looked Hard At Medicaid In Budget And With Veto Overrides

Jul 10, 2017

Nine of the 11 vetoes that state representatives voted to override in the state budget this week are related to Medicaid, though not the big veto on the plan to freeze Medicaid expansion enrollment next year. That was likely no accident, because Medicaid was in the spotlight and under the microscope this time.

Medicaid is more than half of the state budget, covering more than two million Ohioans. It’s always been a major concern of lawmakers. These overrides of Gov. John Kasich’s vetoes were the first in 40 years.  The nine Medicaid related veto overrides included setting rules on coverage of optional groups, described by House Finance Chair Ryan Smith of Bidwell in southern Ohio: “We have no controls over eligibility or anything else. We need the flexibility and control to be able to match the power of the purse.”

Lawmakers rejected Kasich’s vetoes of an increased tax on Medicaid managed care providers, on increased payments to nursing homes and for neonatal services, and on requiring his administration to seek permission from the Controlling Board before spending some Medicaid money. And they overturned his rejection of the plan to ask the feds for the power to charge Medicaid recipients monthly premiums, as noted by a chief backer, Jim Butler of Oakwood near Dayton.  “It actually provides skin in the game and incentives for healthy outcomes, and actually helps people come up and off of Medicaid.”

And Democrats were solidly on board with four of those overrides.

Those votes were soundly blasted by Gov. John Kasich’s Office of Health Transformation director Greg Moody, who said that even before the veto overrides, lawmakers didn’t put enough money into Medicaid. “The consequence of that instability and particularly from the appropriation gap is direct translation into provider rate reductions, not just on the expansion group, but on all Medicaid providers.”

It’s clear Medicaid was a target of lawmakers, said Matt Mayer with the conservative research group Opportunity Ohio. Mayer said legislators were obviously looking at what might happen in Washington during this budget process.  “I think lawmakers see that it is becoming a greater Pac-man of the state budget and especially will be so in future years as the federal support looks very much in jeopardy,” Mayer said. “And they want to, I think, control that spending today because they know tomorrow it’ll be out of control and even greater dependency on the program.”

John Corlett was the Medicaid director under Democratic former Gov. Ted Strickland. Corlett, who’s now with the think tank the Center for Community Solutions, said he thinks it’s simply that some lawmakers didn’t want to expand Medicaid to the populations that are covered, which he said endangers the state’s efforts to fight the deadly opioid crisis. “The billion dollars that Ohio spent to combat this opiate epidemic – about $650 million of that was paid for by Medicaid,” Corlett said. “So by taking some of the steps the legislature is proposing, they’re really threatening to undo that path to recovery.”

Corlett said undoing the state-federal Medicaid partnership would be devastating, but Mayer said the state should come up with its own opioid battle plan and use rainy day funds if needed in the interim.

Mayer, who’s been an outspoken critic of Kasich Medicaid expansion, says it was initially estimated 275,000 people would sign up – now 700,000 are covered, and that was in a fairly good economy. “And I think that’s what’s also driving lawmakers – they recognize that Ohio is into a recession, but if the nation or the globe goes into recession, Medicaid expansion is going to go even further off the rails as enrollment probably surpasses a million,” Mayer said.

But Corlett says though the Medicaid expansion group is huge, there’s been underspending in the program, which gets credit for helping Ohio end the fiscal year in the black in spite of tax collections that were short of projections. “Obviously at the beginning of this expansion of Medicaid several years ago, there was a big increase in the caseload,” said Corlett. “But what we’ve seen over time is that has leveled off, and those increases have become much more sustainable. And I think that speaks to the fact that the program is so well managed.”

And there is a big Medicaid related veto that’s still out there. If lawmakers choose to override it, the Kasich administration would have to ask the feds for permission to freeze enrollment into Medicaid expansion, which Kasich has spent most of his time in the national spotlight recently fighting to keep.  Some estimates say could cost half a million people in the expansion group their coverage, though supporters of an override say that would not be immediate but over time.