HPIO releases explainer on potential Ohio impact of federal financing changes to Medicaid funding

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The Health Policy Institute of Ohio has released a new policy explainer on changes to Medicaid financing in Ohio.
 
HR 1, the federal reconciliation bill sometimes referred to as the “One Big Beautiful Bill Act” or the “Working Families Tax Cuts Act,” includes provisions that will have major impacts on Medicaid financing in Ohio. These provisions affect provider taxes, as well as one of the ways that states increase payments to providers who treat patients with Medicaid coverage and invest in quality improvement efforts.
 
Data included in the explainer shows that Ohio could face an estimated annual loss of $2.1 billion in annual Medicaid funding with the elimination of Ohio’s health insuring corporation (HIC) franchise fee and an estimated loss of $733 million and $933 million per year from modifications to Ohio’s hospital franchise fee, as illustrated above.
 
While the exact impacts of these changes to financing are not yet fully known, they will reduce Medicaid funding in Ohio by billions of dollars. Ohio policymakers will need to make important decisions to mitigate these funding cuts. For example, the state can modify the HIC franchise fee to make it compliant with new requirements, preventing its elimination.
 
The policy explainer (and accompanying 4-page summary) provides more detail on Medicaid funding losses in HR 1 and outlines potential state responses to these provisions.