When the Ohio Office of Budget and Management (OBM) announced on Tuesday, May 6 that April tax revenues were $866.5 million short in this year’s budget it didn’t really surprise me. When one considers Ohio’s record unemployment claims, it was expected that income and sales tax proceeds would take a big hit. OBM Director Kim Murnieks explained that $600 million of the shortfall is due to the delay in the income tax filing deadline, which was moved to July 15 instead of April 15. The year-to-date revenue picture might have been even worse if the state economy and resulting tax revenue hadn’t been so strong prior to the beginning of the COVID-19 pandemic.
Ohio’s Medicaid program leaders have found a way to make these cuts without restricting eligibility for new enrollees or reducing coverage or benefits for existing Medicaid consumers.
The bad revenue news was quickly followed by an announcement from Governor Mike DeWine of $750 million in general budget cuts in the last two months of the fiscal year (Ohio’s fiscal year ends on June 30). The cuts included $465 million in cuts to K-12 and higher education, $210 million in cuts to Medicaid and $100 million in cuts to other agencies. The only state department exempted was the Ohio Department of Rehabilitation and Corrections.
As nearly a quarter of Ohio’s population receives their health insurance through the Medicaid program, concerns were quickly raised about what the impact of the cuts would be on those who depend on Medicaid for their health care. Many asked how the state could even think about cutting health care benefits in the middle of the pandemic. A Politico article carried the headline “States cut Medicaid as millions of jobless workers look to safety net” along with a photograph of Governor DeWine.
But at least for Ohio’s Medicaid program, leaders have found a way to make these cuts without restricting eligibility for new enrollees or reducing coverage or benefits for existing Medicaid consumers. That’s because the Ohio Department of Medicaid looked closely at what it was currently paying private Medicaid managed care insurance companies and whether the level of those payments was still justified considering the drop in non-COVID-19 related health care. For example, Ohio’s hospitals have said that a third of their revenue disappeared when non-essential medical procedures were suspended. Much of that revenue would have come to hospitals from Medicaid managed care plans.
The future of Medicaid eligibility and benefits isn’t as clear. Ohio will face budget holes in the new state budget year, that begins on July 1, that will also need to be filled. Meanwhile Congress has been slow to act on a request by the nation’s governors, including Governor DeWine, that the federal government pick up a larger share of the Medicaid tab. Without this additional aid, states could be in a very difficult budget spot as caseloads continue to climb. Some projections show Ohio could add a million people to the program by the end of 2020 if unemployment rates continue at record levels. At the same time federal maintenance of effort protections, which prohibit eligibility reductions, could eventually expire when federal emergency declarations expire.
The future of Medicaid eligibility and benefits isn’t as clear.
The more than two-million Ohioans who are already enrolled in Medicaid or seeking to enroll because of loss of a job, a furlough, or a reduction in income should know their ability to keep their Medicaid coverage or to sign up for coverage is not affected by recent Ohio Medicaid budget cuts. If you’ve lost your job or you have been furloughed, and lost your health insurance, you can apply online for Medicaid 24/7 at https://benefits.ohio.gov/. The good news for now is, no Ohioan will lose Medicaid coverage or benefits because of the recently announced budget cuts.