In his second executive budget proposal, Governor Mike DeWine faces a much different funding environment than the one he faced in 2019. With an ongoing pandemic and economic recession, federal support has bolstered the state’s budget picture and helped prevent catastrophe.
The Federal Medical Assistance Percentage is one of the most effective tools to ensure Ohio doesn’t have to make cuts to Medicaid or borrow from the rainy-day fund.
As we have written about before, the Federal Medical Assistance Percentage (FMAP) is one of the most effective tools to ensure Ohio doesn’t have to make cuts to Medicaid or borrow from the rainy-day fund. Through Congressional action, states have been able to take advantage of “enhanced” FMAP (eFMAP) to use federal dollars in lieu of state resources, and stave off cuts during the public health emergency. When comparing the differences between February and December 2020, where more than 328,000 Ohioans enrolled in the program, we can see the profound impact this support has made:
Importantly, the biggest impact of eFMAP is not for the Medicaid Expansion group as the federal provision regarding eFMAP did not apply to that category of enrollees. Instead, eFMAP has benefitted the Aged, Blind and Disabled (ABD) and Covered Families and Children (CFC) groups. And while caseloads for CFC increased as parents and children enrolled in the program, the ABD group did not see a caseload increase, and both saw their state share of spending decrease. This includes the local dollars provided by developmental disability boards that are used as state match. Given this context, it’s clear eFMAP is a particularly vital benefit for these populations when we consider how the disabled and elderly are disproportionately vulnerable to the impacts of the virus. So what does this mean for Ohio’s budget?
What does this mean for Ohio’s budget?
Upon taking office, President Joe Biden extended the public health emergency, thus extending the availability of eFMAP to states. Using the data provided above, this represents more than $106 million per month the state will receive in federal support for Medicaid. Looking at the budget, which estimates this funding continues through the rest of the calendar year, we see a significant benefit in State Fiscal Year (SFY) 2022 with sizable increases in the state share in SFY 2023. But don’t be fooled: that’s eFMAP going away, not the state growing the size of the program. And while we can and should have a policy debate about what to fund, what we do know is that this mechanism has gone a long way to make Ohio’s budget more stable, that Ohio’s older adults and disabled have had their services maintained at a time when they need it most and that raiding the rainy-day fund isn’t necessary to pass Ohio’s budget.
