Medicaid Expansion: What Does It Mean for Ohio?

Kegler Brown Government Affairs Update

In February 2013, Governor Kasich included in his proposed biennium budget – constitutionally required every odd year – a Medicaid expansion, in which the Federal Government would pay 100 percent of the costs of covering these newly eligible individuals for three years through 2016. Ninety percent of the costs would be covered through 2020 and beyond for approximately 275,000 adults. Of note, Kasich is an opponent of the Affordable Care Act (ACA), and Ohio law had given the Governor authority to expand Medicaid.

Both the House and Senate rejected the Medicaid expansion language, and instead inserted language expressly prohibiting the expansion. However, the Governor vetoed this language in June (Ohio’s Constitution permits a line-item veto). Several bills related to Medicaid expansion and reform have been introduced since, but no expansion was imminent.

On October 11, Governor Kasich, through his Medicaid director, asked the Ohio Controlling Board (a legislative oversight committee responsible for appropriating excess federal funding) to increase its appropriation authority and spend an additional $2.5 billion in federal money over the next two years as a Medicaid expansion. Ohio law allows its Medicaid director to submit amendments directly to the U.S. Department of Health and Human Services, which triggers the right to additional federal dollars. However, actually spending the money takes an act of the Controlling Board. The Controlling Board is made up of 7 members: a Governor’s appointee, 2 House Republicans, 2 Senate Republicans, 1 House Democrat and 1 Senate Democrat. On Monday, October 21, the Controlling Board approved the request with 3 Republicans and 2 Democrats supporting the request and 2 Republicans opposing it.

On October 22, several House Republicans and the Cleveland and Cincinnati right-to-life organizations filed suit in the Ohio Supreme Court seeking an order to force the Controlling Board and the Department of Medicaid to reverse the action, unless and until the legislature approves the expansion by statute. The suit ostensibly argues that the Controlling Board exceeded its legislative authority and requests expedited review to avoid serious harm to Ohio.

Foreshadowing its defenses, the state has argued that even if the case is properly before the Supreme Court, the Medicaid director's decision-making authority to expand is clearly within his statutory authority, the Controlling Board's approval of Federal dollars is final under the current budget language, and the plaintiffs' claim of dire consequences by January 1, 2014, is a dramatic overstatement because the state can opt out without penalty if the Federal Government doesn't honor the dollar commitments.

The Supreme Court is requiring briefing that will be complete within a month. Given the precedent potential and the separation of powers implications on such a controversial issue, it's likely that the state defendants would seek to challenge the plaintiffs' standing and the jurisdiction of the court, as well as the case's merits.