Economic and fiscal impacts of Medicaid expansion Reversal in Ohio

Economic and fiscal impacts of Medicaid expansion Reversal in Ohio

Medicaid provides health insurance coverage to millions of Ohioans who would otherwise be uninsured. In 2014, Ohio expanded Medicaid coverage to hundreds of thousands of adults with low incomes – including people who are working or veterans and parents, grandparents and other caregivers. As of March 2025, nearly 770,000 Ohioans are covered through Medicaid expansion.

Ohio policymakers are considering discontinuation of Medicaid expansion coverage if the federal government reduces funding for this group. To inform the decision, HPIO is releasing a series of briefs that summarize data and research on the potential impact of the change.

The Health Policy Institute of Ohio commissioned Regional Economic Models, Inc. (REMI) to analyze the state-level and regional economic and fiscal impacts of reversing Medicaid expansion in Ohio.

This included both a scenario in which Medicaid expansion is fully eliminated and scenarios in which the Federal Medical Assistance Percentage (FMAP) for the Medicaid expansion population falls from the current level of 90 percent. In the latter scenarios, alternative FMAP values ranged from 85 percent down to 55 percent in 5 percentage point increments.

REMI based its analysis on annual estimates for 2026-2030 from the Urban Institute, which included direct impacts on health care provider revenue by industry in the elimination scenario and increases in the state’s Medicaid obligation in the lower FMAP scenarios.

3 Key Findings for Policymakers

• Eliminating expansion would slow job growth by more than 50,000 in Ohio, compared to if Medicaid expansion remained intact over the next five years. About 45% (more than 28,000) of the potential job losses would be in the healthcare sector and 55% would be spread widely across the state economy, including more than 6,400 construction jobs, more than 2,500 jobs in administrative and support positions and more than 2,000 restaurant jobs.
• Ohioans would see an aggregate decline in personal income growth of $4.7 billion in an average year, representing more than $900 per household.
• Eliminating Medicaid expansion would slow state tax revenue. The growth in state general fund tax revenue would fall by an annual average of $220.6 million, with more than a quarter coming from the personal income tax and the remainder coming from a combination of sales taxes and the Commercial Activity Tax.

About HPIO's 2025 Ohio Medicaid Expansion Study

HPIO has launched an expansive study on the potential impacts of the elimination of Medicaid expansion in Ohio. 

Since Ohio expanded Medicaid eligibility in 2014, hundreds of thousands of residents with lower incomes – including people who are working, parents, grandparents, veterans and caregivers – have gained access to medically necessary health care. As of March 2025, nearly 770,000 Ohioans are covered through Medicaid expansion. 

The federal Affordable Care Act (ACA) and a subsequent U.S. Supreme Court decision permitted states to expand Medicaid eligibility to adults earning less than 138% of the federal poverty level (FPL). The federal  government pays 90% of the cost of the Medicaid expansion group and the state government pays 10%. The proposed 2026-2027 biennial state budget (House Bill 96) would discontinue Medicaid expansion if the enhanced FMAP for Medicaid expansion drops below 90%. 

Resources

• More information about the study and links to additional briefs can be found on the 2025 Ohio Medicaid Expansion Study page.
• Eliminating Medicaid Expansion in Ohio in Response to Reduced Federal Funding, prepared for HPIO by the Urban Institute
• HPIO’s Policy Considerations: The Future of Group VIII (expansion) Medicaid Coverage in Ohio brief contains more general information and considerations about Medicaid expansion coverage as policymakers consider the future of the program.
• Ohio Medicaid Basics 2025 provides an overview of the Ohio Medicaid program, including eligibility, covered services, spending and recent policy changes. 
• 4-page summary of all five briefs in this series

Funders

This study was made possible by support from the bi3 Fund, Interact for Health, Mt. Sinai Health Foundation, The George Gund Foundation, the Harmony Project, The Columbus Foundation and HPIO’s other core funders.