Legislative Budget Office of the Legislative Service Commission
expenditures. Under HCAP, the state makes subsidy payments to hospitals that provide
uncompensated care to low-income and uninsured individuals at or below 100% of the federal
poverty level. The Ohio Department of Medicaid (ODM) planned to make two HCAP payments,
both non-GRF funded, in September and in October. However, these two payments were
disbursed in December and January instead, resulting in large positive variances in non-GRF
Medicaid expenditures for both of the months of December and January. In January, the
negative monthly variances in several other non-GRF funded payment categories partially offset
the positive $316.8 million monthly variance for the HCAP payment.
For the YTD through January, both GRF and non-GRF Medicaid expenditures were below
estimates, by $459.2 million (4.8%) and $365.9 million (5.0%), respectively. Including both the
GRF and non-GRF, all funds Medicaid expenditures of $15.91 billion were $825.0 million (4.9%)
below the YTD estimate.
Table 5 shows GRF and non-GRF Medicaid expenditures for ODM, the Ohio Department
of Developmental Disabilities (ODODD), and six other "sister" agencies that also take part in
administering Ohio Medicaid. ODM and ODODD account for about 99% of the total Medicaid
budget. Therefore, they also account for the vast majority of variances in Medicaid
expenditures. The other six agencies – Job and Family Services, Health, Aging, Mental Health
and Addiction Services, State Board of Pharmacy, and Education – account for the remaining
one percent of the total Medicaid budget. Unlike ODM and ODODD, the six "sister" agencies
incur only administrative spending.
Table 6 shows all funds Medicaid expenditures by payment category. Overall
expenditures from all four major payment categories, Managed Care, Fee-For-Service (FFS),
Premium Assistance, and Administration, were below their YTD estimates. Managed Care had
the largest overall negative variance of $423.0 million (4.2%), followed by FFS ($344.6 million,
.4%), Premium Assistance ($43.7 million, 6.6%), and Administration ($13.7 million, 2.2%).
Expenditures from all Managed Care categories were below their YTD estimates except
for MyCare, which had a positive YTD variance of $48.0 million (3.4%). MyCare is a managed
care program for Ohioans who are eligible for both Medicaid and Medicare. Group VIII had the
largest negative YTD variance of $229.2 million (8.6%) within the Managed Care category,
followed by P4P & Insurer Fee (Pay for Performance and Health Insurer Fee) at $96.0 million
33.0%), and CFC (Covered Families and Children) at $88.9 million (2.5%). The negative
variances for Group VIII and CFC were mainly due to lower than expected caseloads. For the
seven months of FY 2019, on average the monthly managed care caseloads for Group VIII and
CFC were 8.0% (51,300) and 2.1% (32,900), respectively, below estimates. Finally, $61.0 million
of the $96.0 million negative YTD variance in the P4P & Insurer Fee category was due to the
lower than expected Health Insurer Fee. The Health Insurer Fee – a source of funding for the
Marketplaces under ACA – is a tax by the federal government on certain entities that provide
health insurance. The tax applies to Me11dicaid managed care and is incorporated into Ohio's
Medicaid managed care capitation rates.
The Health Insurer Fee was in effect from 2014 through 2016. The U.S. Congress approved a
one-year moratorium for 2017 but the tax went back into effect (and remains in effect) for 2018.
Congress suspended the tax once again in 2019; if not further delayed, it will be collected again
beginning in 2020.
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