Columbus, OH – The Buckeye Institute presented testimony to the Ohio House Medicaid Committee on Tuesday, suggesting reforms to improve Medicaid's integrity and protect the program from potential federal rule changes. Rea S. Hederman Jr., vice president of policy at The Buckeye Institute, addressed the committee at the request of its chair.
Hederman highlighted an Ohio auditor’s report estimating that the state might be overpaying $209 million for non-resident Medicaid recipients. He noted that "[r]ecent national estimates of $100 billion in improper Medicaid payments likely represent a best-case scenario." He emphasized the importance of Ohio's annual review of enrollee eligibility to prevent such improper payments.
The Buckeye Institute proposed three key reforms:
1. Require address verification for Medicaid payments without relying on enrollee self-attestation. This would involve improving data systems across various agencies to reduce redundancy and errors. "Real-time data sharing among integrated data systems will improve payment accuracy and monitoring," said Hederman.
2. Pursue Ohio’s 1115 Work and Community Engagement Waiver to promote economic stability and financial independence while improving health outcomes by encouraging engagement with healthcare services.
3. Protect current Medicaid enrollees against reductions in federal matching funds by adopting a trigger mechanism if Washington cuts its reimbursement rate from 90 percent to 65 percent, which could increase costs for Ohio taxpayers by $1.5 billion annually.
Medicaid remains a significant part of Ohio's budget, with Governor DeWine proposing $48 billion in all funds for FY 2026. The program is largely funded through federal contributions, with states receiving reimbursements based on their per capita income.
Ohio faces challenges maintaining Medicaid’s integrity due to improper payments made to ineligible participants, partly because many enrollees are transient or difficult to locate. An audit revealed issues with verifying residency for managed care enrollees, leading to substantial financial impacts.
Potential changes in Washington could affect how states manage their Medicaid programs, including adjustments to reimbursement rates and scrutiny over taxes on healthcare providers used as funding sources.
Hederman concluded his testimony by reiterating the need for reforms: "Disallowing ineligible recipients to enroll is more effective than trying to purge ineligible enrollees later."