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Nearly 3 million people are enrolled in Medicaid in Ohio, including children, people with disabilities, and older adults. The Ohio Department of Medicaid (ODM) is the largest maternity care payer in Ohio. Since implementation of the Affordable Care Act (ACA) there has been a dramatic reduction in uninsured rates among low-income adults, leading to fewer uncompensated care burdens for providers and improved access for beneficiaries.
Medicaid not only ensures coverage for vulnerable populations but also the ability of hospitals, community health centers, and critical access facilities across Ohio to provide care.
Savings will come from people losing health coverage, not Medicaid reforms
Beginning January 1, 2029, non-exempt expansion adults aged 19–64 would have to complete at least 80 hours of work or qualifying activities per month (e.g., volunteer service, education, job training) to maintain eligibility. Though, a work requirement waiver has already been submitted in Ohio.
Public programs should promote accountability and while people who can work should be supported to do so, the Medicaid work requirement being debated in Congress does neither. It creates more bureaucracy and not better outcomes. The plan is modeled after Georgia’s Pathways program, which has been expensive and largely ineffective. It cost millions but helped very few people.
To be clear, any “savings” found from these changes will be due to people losing health coverage, not true reforms that will improve the Medicaid program. Many people who lose coverage under these rules are already working or caring for family but cannot meet strict reporting requirements.
This is not about saving money. It is about making it harder to stay insured. Cutting coverage through red tape does not strengthen Medicaid. It weakens it.
Moratorium on new or increased provider taxes
States commonly fund their share of Medicaid through provider taxes, which are taxes on hospitals, nursing facilities, managed-care organizations, and other entities that are currently capped at 6 percent of net patient revenues. The proposed budget reconciliation text would freeze all existing provider tax rates and prohibit new or increased assessments, effectively locking in today’s revenue indefinitely.
Provider taxes help close funding gaps for children’s behavioral health, maternal care, rehabilitative services, and low reimbursement rates, freezing them would erode critical resources over time. Without alternate financing mechanisms, states could be forced to cut eligibility, eliminate optional benefits (such as prescription drugs, clinic services, and home-and-community-based services), or further lower payment rates to providers.
Revising limits on State-Directed Payments (SDPs)
State-directed payments (SDPs) allow managed-care plans to channel added funding to hospitals for improved quality of care, behavioral health, obstetrical care, and other community priorities. Currently, the upper limit for SDPs is set at the average commercial insurance rate, which are typically the highest reimbursement rates; the new proposal would cap these payments at published Medicare rates, which typically fall between commercial and Medicaid rates, for any SDP adopted after enactment.
Although existing SDP agreements remain grandfathered, states could neither increase them nor expand into new programs without strict preapproval. Over time, this freeze would fail to keep pace with rising health-care costs, further widening the gap between Medicaid reimbursements and actual hospital expenses.
Delaying streamlined eligibility rules
The streamlining rules for Medicaid, CHIP, and Basic Health Program applications and renewals intended to simplify enrollment, accept self-attestation for income, align family-size definitions, and limit renewal frequency would be delayed for ten years under the draft legislation. Similarly, provisions that automatically enroll certain Supplemental Security Income recipients into Medicare Savings Programs would be put on hold.
Delaying these rules threatens to increase administrative burdens, roll back coverage gains, and lead to higher uncompensated care rates.
Increasing redetermination frequency
Under current law, adults in the Medicaid expansion group undergo eligibility reviews every 12 months. The new text would require these determinations every six months, doubling administrative work and raising the risk that eligible individuals lose coverage due to paperwork delays or procedural hurdles. This is another change that creates more red-tape and savings result from loss of coverage due to administrivia, not true ineligibility.
Adults in the Medicaid expansion group undergo eligibility reviews every 12 months. The new provision would require these determinations every six months.
Limiting federal participation during verification
The proposal bars federal financial participation (FFP) in Medicaid and CHIP for applicants without verified citizenship or satisfactory immigration status during a “reasonable opportunity period,” potentially delaying or denying coverage for new enrollees. Although states may opt to cover individuals during this window, the change introduces uncertainty and could result in coverage gaps for both citizens and lawfully present immigrants.
Reduced FMAP for covering undocumented immigrants
States that use Medicaid infrastructure or another state-based program to cover undocumented immigrants would see their expansion FMAP drop from 90 percent to 80 percent for those services. Because hospitals must treat all emergency cases under the Emergency Medical Treatment and Labor Act (EMTALA), this cut shifts more uncompensated care costs onto providers and state budgets.
Staffing standards and moratoriums
The current reconciliation text would remove a policy designed to ensure safe care environments through minimum nurse staffing requirements. The original rule implemented by the Biden administration in 2024 was an attempt to address chronic workforce shortages in nursing facilities and improve discharge planning from hospitals to nursing facilities.
Medicaid’s multifaceted role as a major health insurance coverage source and a driver of health equity makes it especially concerning if these proposed cuts in provider taxes, supplemental payments, eligibility processes, and matching rates remain in the federal budget. Preserving and strengthening enrollment rules and service protections is critical to safeguarding care for millions of lower-income Ohioans, while maintaining the stability of hospitals, community health centers, nursing facilities, and Ohio’s state budget.
