Legislative Budget Office of the Legislative Service Commission
GRF and non-GRF, all funds Medicaid expenditures were $164.4 million (7.4%) below estimate
in February and $989.4 million (5.2%) below estimate YTD at the end of February.
Table 5 shows GRF and non-GRF Medicaid expenditures for the Ohio Department of
Medicaid (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 $552.8 million (4.8%), followed by FFS ($373.9 million,
.3%), Premium Assistance ($55.0 million, 7.2%), and Administration ($7.6 million, 1.1%).
Expenditures from all Managed Care categories were below their YTD estimates except
for MyCare, which had a positive YTD variance of $47.2 million (2.9%). MyCare is a managed
care program for Ohioans who are eligible for both Medicaid and Medicare. Group VIII had the
largest negative YTD variance within the Managed Care category at $297.8 million (9.7%),
followed by CFC (Covered Families and Children) at $120.1 million (3.0%), and P4P & Insurer
Fee (Pay for Performance and Health Insurer Fee) at $96.0 million (33.0%). The negative
variances for Group VIII and CFC were mainly due to lower than expected caseloads. For the
first eight months of FY 2019, the average monthly managed care caseloads for Group VIII and
CFC were 8.1% (51,400) and 2.1% (33,000), respectively, below estimates. Finally, $61.0 million
of the $96.0 million negative YTD variance in the P4P & Insurer Fee category was due to lower
than expected Health Insurer Fee payments. 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 Medicaid mana1g0ed care companies and is
incorporated into Ohio's Medicaid managed care capitation rates.
The negative YTD variance in FFS was primarily due to lower than expected FFS
caseloads. Beginning January 1, 2018, newly eligible individuals are removed from FFS and
enrolled onto managed care shortly after receiving Medicaid benefits. Previously, when ODM
prepared the estimates, newly eligible individuals could remain in the FFS system for several
weeks while they decided which managed care plan in which to enroll.
Health and Human Services
The negative YTD variance in the Health and Human Services program category
increased $6.0 million in February to $53.2 million (5.6%). The most significant negative YTD
variance was $36.5 million for the Ohio Department of Job and Family Services (ODJFS),
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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