ORIGINAL STORY: Ohio Governor John Kasich signed the state budget late Friday but not before vetoing a controversial enrollment freeze for the state's Medicaid expansion that he spearheaded in 2013.
In his veto statement, Kasich said the enrollment freeze violates federal law prohibiting states from “denying coverage to members of an otherwise eligible group.”
He said the Medicaid expansion has brought “improved access to care, decreased costly emergency room use, better overall health status and improved opportunities to seek and continue employment.”
“This provision would eliminate any chance of these improvements continuing on a going forward basis - to the detriment of the state’s economy in general and needy Ohioans in particular,” Kasich said.
The two-year $133 billion 2018-2019 budget was approved on party lines Wednesday in the Republican-dominated House and Senate. Overall, said Kasich, it is a good budget that is structurally balanced and he complimented the legislature. But he vetoed 47 line items.
“We have some disagreements, as to be expected,” Kasich said after signing the budget minutes before midnight. He it was critical that Ohioans in need be served, particularly those with mental illness and drug addiction, along with children.
RELATED: 500K Ohioans could lose health care with freeze in Medicaid signups, Kasich says
Kasich’s move sets up a veto standoff with the Ohio General Assembly, dominated by fellow Republicans who ignored many of his key proposals in the executive budget he outlined earlier this year.
“Our members are reviewing the vetoes and will be talking about the next step,” said John Fortney, press secretary for Ohio Senate President Larry Obhof, R-Medina.
“As far as the Governor’s vetoes are concerned, there are some provisions that we will need to take a closer look at over the next several days,” said House Speaker Cliff Rosenberger, R-Clarksville. “Through the holiday weekend, we will be discussing with the members of our caucus the best possible course of action to take.”
After the Senate added the Medicaid freeze to its proposed budget Kasich’s office said freezing enrollment under the Medicaid expansion could cause 500,000 Ohioans to lose coverage in the first 18 months after the ban went into effect on July 1, 2018. The “freeze could lock enrollees in poverty” and “likely would result in a legal challenge,” according to a memo released by the Governor’s Office of Health Transformation.
Kasich pushed for expanding Medicaid in Ohio under the Affordable Care Act and has spent much of the past week in Washington, D.C., protesting the Medicaid cuts in the U.S. Senate’s proposed health care bill.
Even if the legislature overrides his veto, the freeze cannot go into effect without the state first obtaining a federal waiver.
Kasich went around lawmakers in 2013, using a state Controlling Board vote to expand the program that now provides coverage to about 725,500 Ohioans at a cost of more than $5 billion — the bulk of which is picked up by the federal government. On Friday, Kasich also vetoed the legislature’s effort take away some of the Controlling Board’s power.
GOP lawmakers and conservatives say the rising costs of Medicaid are unsustainable.
“We think especially on Medicaid there are some real strong efforts to try to address the real problems we have with that program, both on the fiscal side and from the standpoint of trying to improve the whole healthcare system,” said Greg Lawson, research fellow at The Buckeye Institute for Public Policy Solutions, a conservative Columbus think tank,
But Medicaid supporters say the freeze will do real harm to Ohioans.
“Passing the Medicaid expansion freeze and kicking people off of Medicaid is unacceptable, harmful, and cruel and unusual punishment,” said Rep. Emilia Strong Sykes, D-Akron.
House Minority Leader Fred Strahorn, D-Dayton, and State Sen. Peggy Lehner, R-Kettering this week called for a veto of the Medicaid freeze.
“Ohioans need to be healthy in order to be productive in their day to day lives. Without the ability to afford doctor visits, hospital stays, nursing home care, home health care, and long term care costs, families will spiral into debt, illness and despair,” wrote Strahorn and three other top House Democrats in a letter urging Kasich to veto the bill.
“I will vote to sustain the veto,” said Lehner, who voted for the budget on Wednesday. “And I am not at all sure that the Senate has the votes to override.”
Earlier Friday Fortney, said Obhof “runs the caucus democratically, with a lower case ‘d.’”
“Robust debate within the group is always encouraged. With that, Senator Lehner doesn’t speak for the caucus, but is entitled to her own opinion,” Fortney said.
On Friday Senate Democrats released a list of items they want Kasich to veto, including the freeze.
It is anticipated that state GOP lawmakers may attempt an override. The House has a meeting scheduled for Thursday and the Senate is expected to meet the week of July 10.
A three-fifths vote of each house is required to override a veto, so for the Senate that means 20 votes. The House would need 60 votes to reverse a Kasich veto.
Republicans in the General Assembly gained enough seats after the 2016 election to override a veto from Kasich. In fact, Republicans have the largest majority in the 50 years since the current number of legislative seats was set.
State Rep. Niraj Antani, R-Miamisburg, said he wants to hear from constituents before deciding on overrides.
“As a representative of the people, I will seek to vote in their best interest, not to serve personal interest like others,” Antani said. “I encourage my constituents to contact my office to have their voice heard.”
Several local legislators said they would vote to override a veto of the freeze.
“To veto that language would be to perpetuate a program that is not affordable into the future,” said State Sen. William P. Coley, R-West Chester.
“I will vote to override the freeze,” said State Rep. Wes Retherford, R-Hamilton. “As far as any others I will have to see what all he vetoes before deciding them. I believe it is very important that we remind the governor that this is not his personal kingdom, but that the legislature is an important and equal part of the state government.”
“Although I agree with several of the Governor’s vetoes, particularly of several education provisions, I strongly disagree with his decision to veto most of the reforms inserted to control our state’s out-of-control healthcare spending,” said State Rep. Jim Butler, R-Oakwood.
Butler said he also disagreed with Kasich’s veto of a provision for the state to reapply for a waiver for the proposed Healthy Ohio program, which was previously denied by the federal government.
“The Healthy Ohio program will do more than just cut or add spending or increase or decrease who is covered. It will provide incentives for patient choice of healthcare services and rewards for improved health outcomes,” Butler said.
State Rep. Kyle Koehler, R-Springfield, also said he would vote to override a veto of the Medicaid freeze.
In statements released after Kasich signed the budget Obhof and Rosenberger said they are proud of the legislature’s work.
“Despite a challenging fiscal situation, we passed a balanced, responsible budget that maintains historic state investments in education and dedicates significant new resources to fighting the heroin epidemic,” Obhof said.
“The growth rate of this budget is under the rate of inflation and significantly reduces spending, while still being responsive to the needs of all Ohioans,” Rosenberger said. “Despite the challenges we faced, I am grateful that the legislature and administration worked together throughout the process and I am proud of the work we accomplished to balance the budget.”
Also on Friday, Kasich vetoed a provision providing county government and transit systems with new revenue to replace a sales tax on Medicaid managed care plans that ends July 1. The fix, which involved a franchise fee for Medicaid managed care plans, would have provided about $207 million annually for six years to offset the loss of 8.25 percent of county sales tax revenues statewide. For Montgomery County the loss is estimated at $8 million in 2017 and officials say they will have to cut to cover the loss if the legislature doesn’t come up with another plan.
“In the absence of a revenue replacement mechanism, counties will have to reduce or eliminate funding for programs that invest in economic growth and exacerbate the growing pressure on important systems like criminal justice, public safety, and child protection. The demand on these services is only growing in the wake of the opiate epidemic,” said Suzanne Dulaney, executive director of the County Commission Association of Ohio.
“We’ve been cutting and cutting and cutting. Our budget for 2017 is where it was in 2000,” said Montgomery County Commissioner Debbie Lieberman. “If we take this cut we go back to 1995 levels.”
Kasich also vetoed a provision providing $1 million to reimburse counties for voting machine purchases.
He took action on several charter school provisions, including vetoing one that exempts some students at private charter schools from state tests and graduation standards. He left in place alternative graduation rules for the Class of 2018 that are designed to help students who have difficulty passing new state tests.
RELATED: Ohio Senate OK’s softer graduation rules for Class of 2018
He also left in place a provision allowing community colleges to award four-year degrees.
RELATED: State poised to approve 4-year degrees for community colleges
The budget Kasich approved also contains a civil penalty allowing injunctive relief when a company or private property holder violates a new law allowing concealed carry permit holders to bring their guns to work or to other private property. The gun must be kept in the permit holder’s locked vehicle and cannot be taken into the business or property owner’s building without permission.
RELATED: State softens plan to punish employers for not allowing guns on sites