Congress plans to pass major legislation this year that would affect federal tax law and government spending on safety net programs, including Medicaid. Proposals to cut Medicaid funding include reducing the 90 percent federal matching rate that states receive for the Medicaid expansion population covered under the Affordable Care Act, known as enhanced Federal Medical Assistance Percentage, or FMAP, or capping per capita spending on Medicaid expansion enrollees. Both proposals would have the same effect: to significantly reduce federal spending on the Medicaid expansion population. Ohio would not likely make up for such large federal spending shortfalls without cutting eligibility. The Ohio governor’s latest state budget proposal includes a provision that would eliminate Medicaid expansion if enhanced FMAP is lowered by Congress. In this report, we estimate the implications of dropping the Medicaid expansion in Ohio.

Why This Matters

Research has shown that Medicaid expansion was responsible for most of the gains in health coverage under the Affordable Care Act. We estimate that nearly 760,000 Ohioans would be enrolled under Medicaid expansion in 2026. While eliminating the enhanced FMAP for the Medicaid expansion population would reduce federal spending, it would shift those costs to the states. To offset such large reductions in federal spending, Ohio would be forced to consider making cuts to its Medicaid programs, including limiting Medicaid eligibility, further reducing already low provider reimbursement rates, or eliminating optional benefits, raising new revenues, and cutting state spending in other areas.

What We Found

Our main findings are the following:

• If the enhanced FMAP is lowered to 85 percent, and the state does not reduce eligibility, Ohio would have to spend $426 million more in SFY 2026, increasing to $520 million in SFY 2030. Some have proposed lowering the enhanced FMAP to the standard FMAP (64.6 percent in Ohio), in which case, Ohio would have to spend $2.2 billion more in SFY 2026, increasing to $2.6 billion more in SFY 2030.
• We estimate that if Medicaid expansion is eliminated in 2026 in response to shortfalls in federal funding, Medicaid enrollment in Ohio would decrease by 742,000 people, and 435,000 more Ohioans would become uninsured. This represents an increase of 80.3 percent in the number of uninsured nonelderly Ohioans, with the uninsured rate among nonelderly Ohioans rising from 5.9 percent to 10.7 percent.

How We Did It

For this analysis, we used the Urban Institute’s Health Insurance Policy Simulation Model and new information on Medicaid coverage and costs in Ohio to simulate health coverage and costs if Medicaid expansion were eliminated in Ohio in response to a reduction in federal funding.