$2.4 Billion In Federal Medicaid Funds Helps Ohio Avoid Big Budget Hole

Feb 2, 2021

The increase in Ohio Medicaid caseloads could have blown a hole in the new two-year state budget. But the spending plan includes a huge infusion of federal cash for the state’s largest part of the budget, the health insurance program for the poor.

The federal government is continuing a temporary increase in the federal Medicaid assistance percentage, or FMAP. That percentage is calculated using each state's per capita income compared to the national per capita income.

A COVID relief law passed in March 2020 temporarily increased FMAP by 6.2%. The White House has notified states that the increase will continue. For Ohio, that means $300 million per quarter, or $2.4 billion over the two year budget.

But Ohio Medicaid director Maureen Corcoran said there’s a condition attached to that money.

“To be sure that everybody has continuing Medicaid coverage throughout the pandemic as a kind of a safety net, CMS does not allow us to disenroll people or to change their benefits unless they move to another state or they pass away," Corcoran said.

But Corcoran said the funding boost is a relief, since predicting the impact of the pandemic has been difficult.

“This pandemic has really broken all of the rules," Corcoran said. "We expected more people would come on Medicaid. And it's still a lot of people and it's a lot of money. But not as much as we would have expected."

Lt. Gov. Jon Husted said covering those costs without that federal money would absorb most of the $2.7 billion in the state’s rainy day fund.