Former state official: HB96 ‘kill switch’ and runaway spending threaten Ohio Medicaid expansion; PBM, NextGen projects cited as budget pressures

Greg Moody, former director of the governor’s Office of Health Transformation and now a professional‑development director at the John Glenn College of Public Affairs, told the Joint Medicaid Oversight Committee that Ohio’s Medicaid expansion brings billions of federal dollars into the state and warned that language in House Bill 96 could force an abrupt end to the expansion if federal funding levels change.

Moody said expansion delivers substantial federal funds: the department’s recent figures, he said, show the state spent about $838 million in state dollars last year to draw roughly $7.5 billion in federal funds, for about $8.4 billion in total Medicaid spending tied to expansion and related services. He said ending expansion would save a portion of state outlays but would also require the state to replace tens or hundreds of millions of dollars of services currently paid at the 90 percent federal match, including services for mental health and addiction.

“Keeping the expansion means keeping all current services, including mental health and addiction services,” Moody said in his presentation. He told the committee that replacing mental‑health and addiction services now funded through expansion would cost at least $500 million — more than the projected state savings from ending expansion — and recommended changing a proposed statutory trigger in House Bill 96 from an automatic “shall discontinue” to a discretionary “may discontinue” if federal match rates changed.

Moody described two categories of fiscal risk in current proposals: (1) the “kill switch” in HB96 (section 12670 in his testimony), which directs the department to immediately discontinue expansion if federal funding for the expansion groups drops below 90 percent; and (2) what he called “runaway spending” elsewhere in the budget that increases state share obligations irrespective of expansion. He said a safer approach would let state leaders review options if federal match declined rather than automatically terminating coverage.

Moody singled out several NextGen projects and procurement outcomes as current cost drivers. He said OhioRISE (the system for youth with complex behavioral‑health needs) is about $70 million over budget and serving roughly 40 percent fewer youth than planned, and he said the new fiscal intermediary and payment workflows introduced in the NextGen rollouts have caused payment delays and administrative strain. On the single pharmacy benefit manager (PBM), Moody said the department’s actual spending exceeded projections: after three months of start‑up the state projected monthly PBM costs of $396 million but actual spending was about $56 million higher per month; after nine months he said the single PBM was $585 million over projections and the department added roughly $84 million monthly to the budget, which Moody described as contributing to approximately $1 billion in additional spending over a year.

Moody also reviewed longer‑term policy history: he said Ohio expanded Medicaid in 2014 after earlier cost‑containment reforms reduced the program’s growth rate, and noted the expansion produced lower uninsured rates, increased primary care access, higher behavioral‑health treatment numbers (630,000 treated for mental‑health or substance use disorders in the first four years) and other measurable coverage gains. He argued those gains support keeping expansion in place and urged legislators to weigh the full budgetary tradeoffs before adopting an automatic cutoff tied to federal action.

On provider rate increases, Moody said the most recent budgets included broad rate increases and one‑time federal funds were used to make some increases permanent; those commitments require state dollars in later budgets and have become a significant state‑share driver. He noted that many rate increases were targeted at direct care workers and providers facing access problems, but cautioned that across‑the‑board raises can be costly and hard to roll back.

During the committee Q&A members raised PBM specifics, OhioRISE enrollment and claims‑payment concerns; Moody said the PBM contract design and implementation merit oversight and suggested granular analysis (net of rebates and dispensing fees) comparing pre‑ and post‑single PBM spending. On OhioRISE and the fiscal intermediary, Moody suggested the committee pursue oversight questions on enrollment, outcomes and claims processing times.

Moody closed by urging lawmakers to consider both coverage impacts and budgetary consequences: “The stewardship and responsibility to keep it going rests with you,” he said. He offered to respond to committee follow‑ups and to provide analyses comparing spending before and after NextGen procurement changes.

Sources and attribution: Statements in this article come from Greg Moody’s prepared remarks and committee Q&A during the Joint Medicaid Oversight Committee meeting. Numbers are reported as Moody presented them to the committee.