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Medicaid Spending Gets the Spotlight During Ohio Budget Hearings

August 2, 2019

The issue of Medicaid reform was in the spotlight at a hearing before the Ohio Senate Finance Committee during state budget discussions.

    The Senate and House ultimately missed  the July 1 deadline for a budget and as of mid-July, the state was operating on a temporary budget extension. Medicaid reform has been one issue of contention with House Speaker Larry Householder (R-Glenford) stating, “we’re going through a pretty good economic time in the state of Ohio right now, our Medicaid rolls are down, now’s the time to try and initiate some good cost savings measures which are also very beneficial to the Medicaid population.” 

The state’s spending on health care and Medicaid is “unsustainable,” said Greg Lawson, a research fellow at The Buckeye Institute. Lawson testified before the Senate Finance Committee, stating the state’s Medicaid costs have soared 62 percent since 2010, with spending for FY 2021 projected to be $26 billion. 

“Although the federal government has picked up much of the tab so far, there is nothing guaranteed about the federal reimbursements, because Congress could cut back on them at any time,” Lawson told Health Care News.

The aging of the state’s population makes reform particularly urgent, says Lawson.

“Ohio continues to be a grayer population than many other states,” said Lawson. “This helps drive greater costs amongst the elderly and disabled category of Medicaid recipients. While this category has always received Medicaid and was not the subject of the controversy over expansion, they are significantly more expensive due to the level of care needed.”

Suggests ‘Healthy Ohio’ Plan

One solution is for Ohio to adopt the Buckeye Institute’s “Healthy Ohio” plan, Lawson told lawmakers.

“Healthy Ohio offers an innovative use of health savings accounts, creates incentives for healthier choice, and helps those trying to transition from Medicaid into private health coverage without losing benefits,” Lawson testified.

One reform suggested in Healthy Ohio would be to create health savings accounts (HSAs) for Medicaid enrollees, Lawson told legislators. Unused dollars by a recipient could be rolled over into a “bridge account” that could later be used to pay for private insurance.

The use of HSAs could thus help smooth out what Lawson calls the ‘benefit cliff’ problem.

“[This happens] when individuals earn enough to lose Medicaid coverage but not enough to pay for the costs of private coverage,” said Lawson. “This leaves them adrift in a no man’s land with limited access to health care.”

Dueling Budgets

Lawson urged the state Senate Finance Committee to take a second look at the House budget which “provides robust health care pricing transparency, serious emergency room diversions, the elimination of many facility fees that increase costs, and controls for ballooning pharmacy prices.”

The Senate stripped several of those provisions out of its bill, said Lawson.

“They should be restored in order to continue to bend the cost curve of Medicaid down, especially before we encounter the first recession of the Medicaid expansion era,” Lawson told the committee.

Ashley Herzog (aebristow85@gmail.comwrites from Avon Lake, Ohio.

Author
Ashley Herzog writes from Avon Lake, Ohio.
aebristow85@gmail.com