The cost of Ohio’s Medicaid program is expected to be about $470 million less than what was originally estimated in the current two-year budget, and the bulk of that savings goes directly to the state.
The anticipated savings is a result of multiple factors, said Greg Moody, director of the governor’s Office of Health Transformation. A big one is that fewer people than expected are signing up for traditional Medicaid coverage, which costs the state more than the expanded Medicaid coverage that began this year.
That likely is due, in part, to Ohio’s improving economy, Moody said. Slightly higher household incomes may leave a family still qualifying for Medicaid, but under the expanded program.
It may also be that the state’s estimates of the impact of expanded Medicaid, which is still in its first year, simply were high, he said.
While traditional enrollment is down, the number of enrollees covered by expanded Medicaid is exceeding what was projected. The state had anticipated having 377,000 enrolled under expanded Medicaid by next June when the fiscal year ends. It now expects nearly 100,000 more than that.
The state pays about 37 cents on the dollar for traditional Medicaid. Coverage through expanded Medicaid is funded through the Patient Protection and Affordable Care Act, commonly called Obamacare.
That is why the state will reap most of the benefits of the projected lower costs.
About $350 million of the $470 million in anticipated lower costs is expected to be savings to the state’s share. The total Medicaid budget appropriated for two years, including federal support, was nearly $44 billion.
The savings is significant because it provides a fiscal argument for Gov. John Kasich as he lobbies the General Assembly to continue expanded Medicaid when he presents his budget proposals early next year.
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