Health & Human Services

The Governor of Ohio's End-Run to Medicaid Expansion

Gov. John Kasich is set to push forward Medicaid expansion despite the opposition of his legislature.
by | October 18, 2013

The only thing standing between Ohio Gov. John Kasich and extending Medicaid to 270,000 uninsured residents is a seven-member panel with the power to accept an infusion of federal money.

Kasich, a Republican, will ask a legislative oversight committee known as the Ohio Controlling Board on Monday to accept $2.5 billion in federal money over the next two years as part of the Affordable Care Act’s expansion of Medicaid. The federal government is footing 100 percent of the bill for participating states for the first three years before phasing down support to 90 percent by 2020.

The U.S. Supreme Court decision that largely upheld the law left it up to states whether they’ll replace a patchwork of eligibility rules with a system that covers everyone earning up to 138 percent of the federal poverty level. Ohio’s Republican legislature removed Kasich’s original Medicaid expansion proposal from the two-year budget it passed earlier this year. Then lawmakers took it further, adding language that outright banned an expansion, but Kasich used a line-item veto to strike the provision.

Exactly how the state would fund the expansion beyond this two-year budget isn’t clear.

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“We’ll think of next steps after we get through Monday,” said Kasich spokesman Rob Nichols.

Opponents have labeled Kasich’s efforts an end-run around a legislature that already made its wishes clear. The Controlling Board is forbidden by statute and Ohio Supreme Court interpretation from acting “contrary to legislative intent,” says Robert Alt, president of the Buckeye Institute for Public Policy Solutions, a conservative research group, and Republicans are already lining up to oppose the move in court, he said.

“There’s no argument that can be made that they intended anything other than to protect against expansion,” Alt said.

Indeed, 39 Republicans signed a declaration of protest in the statehouse journal Wednesday, citing that argument and Ohio law.

Nichols, however, pointed to a legal opinion about the power of the governor from private Columbus practice Vorys, Sater, Seymour and Pease. Ross Bridgeman, who leads the firm’s health care group, argued that the governor’s line-item veto had the force of scrubbing the legislature’s “intent” from the budget.

“Whenever a governor in this state vetoes a piece of legislation, as a matter of law it’s void, and so it’s as if it’s never existed in terms of the law,” Bridgeman said.

Unlike other states that require legislative approval for changes to Medicaid, Ohio allows its Medicaid director to submit amendments directly to the U.S. Department of Health and Human Services. HHS approved that request earlier this month, but actually spending the federal money takes an act of the legislature or the Controlling Board, according to Kasich’s Office of Health Transformation.

The state legislature created the Controlling Board in 1917 to adjust spending and approve loans and grants without calling the body back to session. It is also responsible for appropriating excess federal funding, as was the case with money from President Barack Obama’s Race to the Top initiative. Members include one administration official and six lawmakers from both parties. Republicans have four of the seven seats on the Controlling Board.

Ohio Senate President Keith Faber recently told The Columbus Dispatch that he expects Kasich’s proposal to pass the Controlling Board, but he wouldn’t say which Republican lawmaker would give the governor the critical fourth vote.

A number of other states have similar bodies charged with making budgetary adjustments. South Carolina has the Budget and Control Board, which drew a lawsuit when it overruled the legislature on premium spending for state employees. Its membership includes the governor, the treasurer, the comptroller general and two lawmakers. The group has control over many administrative functions of different state agencies and is considered uniquely powerful among experts.

The Kansas State Finance Council includes the governor and members of the state legislature. It generally draws less controversy. When the body recently approved $11.2 million in pay increases for state workers it did so after the legislature had already approved of the raises in its budget.

But perhaps North Dakota’s Emergency Commission most closely resembles the Controlling Board, said Todd Haggerty, a policy analyst at the National Conference of State Legislatures. The Commission of executive leaders and lawmakers deals with transfers, contingency funding and appropriating federal money, much like the Controlling Board. But it hasn’t been used for something as major as a Medicaid expansion, Haggerty said.

Like the Controlling Board, most of these bodies were set up to tweak budgets without calling for the legislature, and most of them have been used to adjust spending in the middle of a fiscal year or transfer money between agencies quickly, Haggerty said. “In many cases a lot of these institutions played a role in the Great Recession making adjustments to balance the budget.”

Most of the 24 states that have chosen to expand Medicaid did so through their legislatures. Several with Democratic governors, such as Kentucky, did so through executive orders. Ohio would be the first to go through an outside panel.

“From a board that essentially toiled in virtual anonymity, it’s catapulted to front-page news,” Alt said. “I think most people, even those in favor of the governor’s policy, nonetheless may have concerns about whether or not you really want this kind of decision being made by seven people.”

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