Budget shortfall may cause cuts in Ohio’s tax-funded Medicaid program

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Ohio Medicaid needs to make cuts, but stakeholders like hospitals are messaging they need a bailout.



Clipped from: https://www.dispatch.com/story/news/healthcare/2020/11/06/budget-shortfall-may-cause-cuts-ohios-tax-funded-medicaid-program-poor-disabled-because-covid/6165391002/


Medicaid caseloads have surged during the coronavirus pandemic, topping 3 million this year, up 9%, from last year.

But as needs intensify, declining state revenue and a projected budget shortfall will challenge the $23 billion health-care program for poor and disabled Ohioans, Medicaid Director Maureen Corcoran said during a virtual post-election conference Thursday.

“We are looking at several-billion-dollar shortfall in this current fiscal year,” Corcoran said.

More:Ohio reports 4,961 new COVID cases, again breaking record; new health officials appointed

Economic downturns tend to cause a spike in Medicaid demand.

“Medicaid is always counter-cyclical with the economy and it lags a little bit,” Corcoran said. “As we think about the recovery, that may take several years, that pressure will be on people who need their health-care services until they get back to a job.

“As tight as our state economy is going to be, it’s going to be important that we continue to support Ohioans, many who have not been out of a job or had the kind of economic experience that we see today.”

She projected that it will take years for Ohioans to recover, and in the meantime, “we do expect the budget to be very difficult … we’ve got some very difficult decisions ahead of us.”

During an hour-long discussion on health care and Medicaid during Impact Ohio’s post-election conference, Corcoran and representatives of the health-care industry said the coronavirus has strained the system, but also spurred improvements.

Mike Abrams, president and CEO of the Ohio Hospital Association, called COVID an “economic broadside for hospitals,” causing them to suspend elective procedures, straining supply chains and forcing staff furloughs as hospitals emptied.

“Ohio hospitals lost $4 billion and counting due to the stoppage of elective procedures,” Abrams said. “A portion of that has been recouped largely by federal aid … maybe 50-55%. For many hospitals it was a lifeline. They were faced with urgent economic circumstances, even making payroll.”

Abrams predicted Ohio will still see some hospital closures because of the economic hit.

But hospitals have been able to keep up with demand for treating victims of the pandemic. Currently, Abrams said Ohio hospitals are treating more than 2,000 COVID patients, about 73% of capacity, with ample supplies of much-needed ventilators and personal protection equipment.

Kelly O’Reilly, president and CEO of the Ohio Association of Health Plans, said insurance companies also have adjusted and tried to pitch in to help.

The plans expanded coverage for telehealth services, continued coverage for furloughed workers, delayed employer premium payments, waived COVID testing fees and expanded services to vulnerable populations including pregnant women and the elderly with food assistance and prescription delivery.

But the pandemic also has created uncertainty for the industry, which is making it difficult for insurers to set rates.

“We don’t know what the impact of that deferred care is going to do in terms of the impact on the system and cost of health care. We don’t know what the long-term impacts of COVID are in terms of the people who have recovered and what the medical impact on their ongoing health looks like.”