Medicaid shake-up could impact 3 million Ohioans and billions of dollars

Major changes are coming to Ohio Medicaid, the health care program that covers 3 million low-income Ohioans and costs $43 billion each year.

Ohio could lose up to $3 billion in state and federal funds for Medicaid in the next two years, experts estimate.

The federal government's "One Big Beautiful Bill" will change how states can tax hospitals, nursing homes and other providers to help pay for Medicaid.

If Ohio doesn't rework some existing taxes by July 2027, it'll lose about $640 million in state funds and $1.5 billion in federal matching money starting in July 2028. Ohio could lose another $733 million to $933 million in state and federal money as Ohio's hospital franchise fee is phased down.

The federal government is also mandating work requirements for about 760,000 people enrolled in Ohio Medicaid.

Now is a good time for Ohio leaders to do a deep dive into Medicaid, decide how to deal with coming changes and determine if the program is working as it should, said Amy Rohling McGee, president of Health Policy Institute of Ohio.

"These are tremendously big decisions to make and we need kind of an all hands on deck approach," she said. She added, "That conversation needs to start ASAP."

Ohio lawmakers focused on Medicaid reforms
Some state lawmakers are ready to start talking about Medicaid reforms.

State Sen. Beth Liston, D-Dublin, and Sen. Bill Blessing, R-Colerain Twp., are co-sponsoring Senate Bill 386, which would shift Medicaid from a managed care model to an administrative services model. An identical bill sponsored by state Rep. Karen Brownlee, D-Symmes Twp., is pending in the House.

Over the past 35 years, Ohio Medicaid has shifted from paying fees for delivered services to a managed care model, where companies are paid a per patient fee each month to coordinate care, approve services and pay claims. Over decades, more and more segments of Medicaid enrollees have been moved to the managed care program.

Ditching managed care for a different model would likely draw opposition from the seven organizations with managed care contracts in Ohio Medicaid. Dayton-based CareSource, one of the largest managed care organizations, said it's keeping an eye on the bills but declined to comment further.

"So many people see that the current system isn't really working," Liston said. "At some point, something has to give."

At a statehouse press conference on April 15, Liston and her bill co-sponsors said restructuring Ohio Medicaid will save between $450 million and $850 million a year, streamline delivery of health care to 3 million people and provide more money for direct care.

"As federal funds become less and less certain, we need to think differently in order to make sure people can still get healthcare," Liston said.

The Ohio Department of Medicaid did not respond to a request for comment.