Ohio Medicaid: Financial impacts of House Resolution 1

Proponents of the federal reconciliation bill lauded some provisions as an opportunity to reexamine both federal health care and social welfare spending. For others, including health care advocates in Ohio, the law has raised various concerns. Officially signed into law on July 4, H.R. 1 includes several provisions that significantly alter Medicaid funding structures and eligibility pathways. Using modeling data from State Health & Value Strategies, quantified financial and enrollment-related impacts the law is expected to have in Ohio over both the short-term and long-term.

A new reality for Medicaid in Ohio

Ohio is one of 40 states, including Washington D.C., that expanded Medicaid eligibility under the Affordable Care Act (ACA). This expansion allowed hundreds of thousands of lower income Ohioans to access health care, largely through a 90 percent federal funding match. With the implementation of provisions such as work requirements, this population is expected to shrink.

Though states have the option to implement work requirements earlier, implementation must occur by January 1, 2027.   This will have an impact on the funds that Ohio receives to support emergency departments, federally-qualified health centers, rural health centers, and the like.

 Ohio stands to lose over $5.1 billion in total Medicaid funding.

According to modeling developed by State Health & Value Strategies, within one year of implementation, Ohio stands to lose over $5.1 billion in total Medicaid funding. Over a ten-year period, that figure swells to more than $53.3 billion in funding reductions. These cuts affect both federal and non-federal funding and will have impacts on enrollment, coverage continuity, and health care delivery across the state.

Year one could see a 10.7% drop, or 337,000 Medicaid enrollees

Ohio will see a dramatic shift in critical funding as the changes required within the law are implemented. The modeling toolkit projects a decline of approximately 337,000 Medicaid enrollees, a 10.7% drop from baseline enrollment. While this figure includes a range from a low of 261,000 to a high of over 412,000, it is clear that a significant portion of the population will lose access to Medicaid coverage.

This reduction in enrollment is directly tied to new administrative requirements (e.g. work requirements), eligibility redetermination (e.g. 6-month redeterminations for expansion population), and loss of pandemic era provisions (e.g. automatic re-enrollment mechanisms that previously protected vulnerable populations).

Ohio is projected to see a $5.13 billion drop in Medicaid spending in the first year. Of this, the federal share accounts for roughly $3.45 billion, while the state’s non-federal share amounts to over $809 million. These losses represent an 11.6% decline in total Medicaid spending, with the federal reduction comprising most of the cut.

For Ohio’s hospitals, community clinics, and long-term care providers, this change will likely translate to fewer reimbursed services and an increase in uncompensated care costs. For patients, especially those in rural or underserved areas, the impact will be felt through reduced access to health care services, longer wait times, and greater financial insecurity.

Ohio will see an estimated $53.3 billion reduction in Medicaid spending over the next 10 years

The modeling data shows that the first year is only the beginning. Over a ten-year period, the losses compound. Total Medicaid enrollment in Ohio is expected to fall by nearly 321,000 enrollees, which is 10% below baseline projections. This suggests that much of the initial disruption in enrollment will not be recovered in subsequent years. Structural and policy barriers implemented through H.R. 1 will effectively create a new normal in which fewer Ohioans are covered by Medicaid.

Total Medicaid enrollment in Ohio is expected to fall by nearly 321,000 enrollees.

The long-term fiscal implications will be severe. Over a decade, Ohio will experience an estimated $53.3 billion reduction in Medicaid expenditures, with the federal government shouldering about $36.3 billion of those cuts and the state contributing $9.9 billion. This equates to a sustained 12.2% reduction in spending compared to previous baseline trends.

Federal funding reductions of this magnitude will force difficult choices at the state level. Ohio policymakers will need to make decisions as to whether there should be cuts to optional benefits which could include dental care, mental health services, or home and community-based care services (HCBS) that are often lifelines for the most vulnerable Ohioans.

Alternatively, policymakers may also be forced to either increase state financial contributions or reduce eligibility thresholds. This would mean that either state line items in future budgets allocated for other services would need to decrease to compensate for this loss in federal funding or significantly less Ohioans would be eligible to receive Medicaid.

Who will be most impacted?

The modeling does not break down impacts by demographic groups, but based on our existing review of Medicaid data, the largest share of impacts will be experienced by:

• Working adults with lower incomes and without employer-sponsored insurance coverage and who face barriers such as maintaining consistent employment and stable housing
• Rural residents, who often rely on Medicaid, which traditionally serves as the pillar of local, rural health systems
• Children and pregnant people in households where a parent may lose coverage

Furthermore, the state’s health care infrastructure, which is already strained by provider shortages, will be under additional pressure. Providers that disproportionately serve Medicaid populations may scale back services or close entirely, especially in areas where Medicaid patients form much of the payer mix.

Administrative burdens: errors, delays, or miscommunication

The impact of H.R.1 is not purely financial. The law includes a range of administrative changes that affect how Medicaid is administered. These include:

• Requirements for six-month redeterminations of eligibility for expansion populations
• Mandates that states use specific data systems, such as the federal “Death Master File” to ensure that individuals do not remain enrolled in Medicaid after death or within multiple states. 
• Delays implementation of rules by the Secretary of Health and Human Services that were aimed at streamlining eligibility and supporting lower income Medicare enrollees.
• Financial penalties for states that exceed a 3% error rate in eligibility determinations

These provisions collectively raise the administrative burden on both the state and Medicaid applicants. As a result, even eligible individuals may be disenrolled due to documentation errors, mail delays, or miscommunication.

A broader fiscal context

To put Ohio’s estimated $53.3 billion in Medicaid losses into perspective, consider that in FY2024, the entire state budget was roughly $100 billion. The Medicaid program represents a large share of that budget, and any reduction in federal support puts additional strain on state resources.

The drop in federal funding means a net loss of dollars flowing into the state economy.

Moreover, the drop in federal funding means a net loss of dollars flowing into the state economy. Medicaid dollars do more than pay for health care that is used to fund jobs, keep rural hospitals open, and stabilize family budgets. The ripple effect from such large cuts will be felt beyond the health care system, affecting economic growth, workforce participation, and even school readiness for children in lower income families.

Hard choices ahead

The passage of H.R. 1 marks a turning point for Medicaid in Ohio. While proponents of the legislation claimed to aim to reduce federal expenditures and tighten eligibility enforcement, the human and financial costs are substantial.

In the first year alone, over 330,000 Ohioans are expected to lose Medicaid coverage, and the state will lose over $5 billion in health care funding. Over the next decade, these impacts will intensify, with more than $53 billion in lost funds, over 320,000 people off the Medicaid rolls, and countless downstream effects on families, providers, and communities.

For Ohio’s residents, health care providers, advocates, and policymakers, the road ahead will require contemplative decision-making. Whether through state level policy modifications, increased investment in enrollment systems, or enhanced support for impacted Ohioans, the need for action is urgent.