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Medicaid director cites drug costs, aging population and PBM changes as primary budget drivers
Summary
Ohio Department of Medicaid Director Maureen Corcoran told the Senate Medicaid Committee that prescription drug cost growth, demographic aging and per-member cost increases are the main drivers of a Medicaid budget rise, and highlighted gains from a single pharmacy benefit manager and OhioRISE children's behavioral-health outcomes.
Ohio Department of Medicaid Director Maureen Corcoran told the Senate Medicaid Committee that rising prescription drug costs, an aging population and higher per-member-per-month health care costs are the primary drivers of Medicaid spending increases in the next biennium.
Corcoran said the department—s executive budget for fiscal 2026 totals about $42.3 billion in all funds with a state GRF share of about $6.5 billion; the department projects further increases in fiscal 2027. She asked lawmakers to weigh programmatic priorities, cost-containment proposals and potential federal changes when reviewing the budget.
Corcoran identified prescription drugs as an outsized driver: she told senators that drug costs accounted for about 6.2% of the PMPM increase in one year and 12.2% in the next year in department projections. The testimony singled out both very high-cost biologic/biosimilar drugs and newer obesity and weight-loss medications (GLP-1 class) as major contributors to trends in drug spending.
The director defended the administration—s single pharmacy benefit manager (PBM) model, saying it reduced administrative spending by $333 million across managed care plans and the department, increased dispensing fees to Ohio pharmacies by nearly $625 million and improved pharmacy participation to over 99% of Ohio pharmacies. "The single PBM has reduced administrative spending overall by $333,000,000 all total of managed care plans and the department," Corcoran said.
Corcoran also highlighted OhioRISE, the specialized managed-care carve-out for children with complex behavioral health needs. She said early data show reductions in emergency room visits and psychiatric stays for OhioRISE enrollees compared with traditional managed care plans and cited metrics including a 41% reduction in ER visits and a 28% drop in psychiatric stays for that population.
On program integrity and eligibility, Corcoran described expanded data-sharing and use of multiple data sources to manage enrollment and post-pandemic unwinding procedures; she noted the department is implementing electronic visit verification (EVV) denials after training and phased implementation.
Senators asked about the executive budget—s trigger language protecting the state from changes to federal match for the Medicaid expansion population and about the department—s public reporting and auditing of managed care plans. Corcoran said the department makes substantial fiscal and quality data publicly available and that full fiscal audits of managed care plans would be impractical for the state to duplicate.
The committee requested corrected hospital impact spreadsheets and additional detail on several Medicaid cost items; Medicaid staff said they would provide updated documents.
Corcoran concluded by stressing the department—s emphasis on transparency, program integrity and targeted investments in behavioral health and children—s services.
No final legislative action was taken during the hearing.
