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Ohio legislative update

7/22/2019

overview

Governor Mike DeWine signed his first budget July 18th, 18 days past the constitutional deadline, after a continuing resolution allowed the government to remain open so the legislature could hash out their differences. The Budget Conference Committee passed their conference report out of committee 5-1 with only Rep. Cera (D-Bellaire) voting against the report. The budget passed the House 75-17 and the Senate 29-1. Before signing the $69 billion budget, Gov. DeWine line-item vetoed 25 items with the majority of them focused on Medicaid and health care policy. G2G’s clients fared well in the budget. Below are details on the final version of the budget

Health

Pharmacy Benefit Managers

Many of DeWine’s 25 budget vetoes pertained to sweeping reforms the House added to rein in the pharmacy middlemen, known as pharmacy benefit managers (PBM), serving the state’s Medicaid system. Investigations revealed a system that was paying the PBMs almost a quarter billion dollars more a year than it was reimbursing pharmacists for Medicaid drugs. The plan gives the state unprecedented control over how prescription drugs get to Ohioans.

DeWine insisted that he remains committed to the legislature’s plan and only vetoed provisions he believed were too restrictive and would make it difficult for his administration to enact. That includes moving to a single pharmacy benefit manager. DeWine also vetoed a provision to require the Medicaid director to work in conjunction with the PBM to establish a single formulary, a list of drugs that Medicaid will cover and how much the state will pay for them. Additionally, a July 1, 2020, deadline for the Medicaid department to finalize new contracts with private managed care plans hired to oversee the tax-funded health-care program was vetoed by the governor.

Drug Pricing

Another vetoed provision was “price transparency” measures requiring hospitals to provide patients with billing estimates in advance, and “surprise billing” language that required insurers to reimburse out-of-network medical services when performed at an in-network facility. Legislators have pursued these types of reforms for years over objections from state hospitals and other health-care providers. In his veto message, DeWine wrote he supports the idea of making medical billing more transparent, but said the measures were potentially duplicative of those happening at the federal level. G2G continues to monitor legislation and discussions on surprise billing and price transparency at both the state and federal levels.

CURE Bill

HB345 from the last General Assembly, known as the CURES Bill and sponsored by Rep. Jim Butler (R-Oakwood) was added to the budget and became law when the Governor signed it. These provisions set forth a multi-state Solemn Covenant of the States that would award prize money for curing diseases based on what states would save by having the diseases cured and not having to treat them over a five-year period. As an example, if 10 states join the compact, they could save a combined $12-$25 billion from a cure for Alzheimer’s disease.

Tobacco To 21

Ohio will be the 18th state to raise the age for tobacco purchases from 18 to 21. The legislature passed version of the budget included a grandfather clause that would have exempted those who turn 18 by October 1st of this year. DeWine vetoed this provision citing the administrative burden it would take to uphold.

EDUCATION

Wraparound Services

The budget provided a big win for a major DeWine proposal. The governor had proposed giving schools across the state $550 million over the next two school years for “wraparound services”, like medical and mental health care, family supports and mentoring. The “student wellness and success” plan, as it is called, is aimed at helping students in every school in Ohio with issues that interfere with learning and with helping them succeed in school and in life. The version passed by legislators added $125 million more than DeWine sought: $275 million this coming school year and $400 million for the 2020-21 year.

Most of the boost comes from raising the scale of payments based on poverty levels of districts. In 2020-21, for example, the poorest 20% of school districts will receive $360 per student, while giving the richest 20% of districts $30 per student. The minimum that any district could receive also was raised from $25,000 to $30,000. These funds will be critical to support DeWine’s commitment to Ohio’s youth. G2G continues to talk to the administration about these funds and how they could best be used by the schools.

BUSINESS

Taxes

A large sticking point and cause for the delayed budget passage was around tax cuts for Ohioans. The final version of the budget includes a cut in personal income taxes by 4% and eliminates the income tax for people earning less than $21,750. The compromise reached after two weeks of negotiation settles on a smaller income tax cut than previously proposed, which eliminates the bottom two tax brackets and retains a debated $250,000 business tax break, though lobbyists and lawyers will now be excluded from this. Additionally, tax cuts worth around $680 million were added to the bill after DeWine originally proposed no major tax changes.

TechCred

To support incumbent workers, the budget will fund 10,000 micro-degrees for the incumbent workforce. TechCred is designed to operate as a partnership between the Ohio Department of Higher Education, the Development Services Agency, and the Governor's Office of Workforce Transformation. The TechCred program gives businesses the opportunity to identify the skills they need, get workers training, and receive reimbursement – giving workers the skills required to advance and businesses the talent they need.

Career Credentials

Designed to implement career readiness programs in reach for more high school students, the program will incentivize every Ohio student graduating from high school to be either college or career ready. The implementation of this program will cover important things like the cost of assessments and testing that can be barriers for some students, the cost of supporting growing programs for in-demand credentials, the cost of establishing credentialing programs in schools where access is limited, and to reward schools who not only enroll students, but continue to support them through graduation.

SOCIAL SERVICES

Homelessness

The final version of the state budget includes an additional $2.5-$3 million a year for affordable housing and homelessness programs. Advocates pushed $8 million more per year for the Ohio Housing Trust Fund but they were pleased to be provided more money for the trust fund for the first time in 16 years. The housing coalition said homelessness has risen 20% in Ohio over the past five years to more than 71,000 people. Of that, children are the fastest-growing portion, with the number now at 20,717, including nearly 3,000 who are less than a year old.

ELECTIONS

Ohio Primary

The proposal to move Ohio’s Primary Election from March 10th to St. Patrick’s Day (March 17th) drew objections from some Democratic lawmakers, particularly from the Cleveland area, which has one of the nation’s biggest St. Patrick’s Day parades. They say the change could hurt voting and poll worker availability. In a letter responding to them, Secretary of State Frank LaRose noted that Ohio has four weeks of early voting and that Arizona, Florida and Illinois also are having their primaries on the unofficial holiday. The Ohio Republican Party says it sought to change the election date in response to national GOP rules on awarding delegates. The final version of the budget passed with the change to March 17th.

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