Report warns Ohio Medicaid spending could reach $118 billion by 2040

Ohio Medicaid spending could reach $118 billion annually by 2040 as the state’s aging population places growing pressure on its long-term care system, according to a report released Wednesday by The Buckeye Institute.

The free-market policy group said Ohio’s health care infrastructure, workforce and financing system are not prepared to meet rising demand from older residents without reforms intended to control costs and expand access to care.

Ohio is home to approximately 2.2 million residents older than 65, and more than one in four Ohioans are expected to be at least 60 years old by 2030, according to the report.

Medicaid, the primary payer for long-term care services in Ohio, accounted for $43.2 billion in state and federal spending in 2025. The Buckeye Institute projects that amount will rise to $60.4 billion by 2030 and $118 billion by 2040 if current trends continue.

Approximately 20% of Ohio Medicaid spending already supports long-term services and supports, the report said.

“By 2030, more than one in four Ohioans will be 60 or older, and the state’s healthcare infrastructure, workforce, and financing mechanisms are not equipped to meet growing demand,” said Rea S. Hederman Jr., vice president of policy at The Buckeye Institute and a co-author of the report.

Hederman said policymakers must address the system before rising costs force the state to raise taxes, reduce benefits or redirect money from other priorities.

The report recommends expanding home- and community-based services, simplifying Medicaid reimbursement, reducing some health care regulations, increasing the direct care workforce and encouraging Ohioans to privately plan for long-term care expenses.

Home- and community-based services allow older and disabled Ohioans to receive care outside nursing homes and other institutions. Those services cost approximately 22% less than institutional long-term care in Ohio, according to research cited in the report.

Programs including PASSPORT, HOME Choice and MyCare Ohio have allowed thousands of residents to receive care at home or move out of long-term care facilities.

The Buckeye Institute cautioned, however, that home- and community-based programs remain vulnerable to fraud, improper reimbursements and payments for services that were never provided.

The report cited a 15% payment error rate within Ohio’s home- and community-based services and recommended stronger inspections, electronic verification and other safeguards as the state expands those programs.

The organization also recommended allowing some rural hospitals to receive Medicaid reimbursement for “swing beds,” which can be temporarily used for skilled nursing or long-term care when nearby nursing home beds are unavailable.

The proposal would use existing hospital capacity in rural and Appalachian communities rather than requiring new long-term care facilities to be constructed.

Workforce shortages present another challenge. The report said staffing shortages affect 28% of Ohio nursing homes, while the state is projected to face a shortage of nearly 5,000 physicians across all specialties by 2030.

The Buckeye Institute also recommended expanding telehealth by allowing some out-of-state health care providers to treat Ohio patients and reducing restrictions on advanced nurse practitioners and other trained professionals.

The report also highlighted House Bill 530, which would establish a Long-Term Care Workforce Study Commission to examine recruitment, training and retention problems in nursing homes, assisted living facilities and home- and community-based settings.

Another recommendation calls for asking the federal government to expand the au pair program to older adults who need help with transportation, meals, medication reminders and other daily activities but do not require skilled nursing care.

The Buckeye Institute also called for stricter Medicaid asset eligibility rules and greater use of private long-term care insurance.

The report argued that people with substantial assets should plan for their own care rather than transferring or shielding assets to qualify for taxpayer-funded Medicaid benefits. It specifically recommended that people who own homes worth more than $1 million should not qualify for long-term care benefits intended for lower-income residents.

The report also argues technology could reduce pressure on caregivers while helping older Ohioans remain in their homes longer.

Remote monitoring devices, fall-detection systems, telehealth services and artificial intelligence tools can alert caregivers to health problems, automate administrative tasks and reduce unnecessary hospitalizations. The report said those technologies should support direct care workers rather than replace them.

The Buckeye Institute estimated that reducing the annual growth of long-term care spending by one-tenth of one percentage point could save more than $911 million over the next decade.

Without broader changes, the group projects Ohio’s Medicaid long-term care expenses alone will reach nearly $15 billion annually by 2036.

“Ohio’s older adult population is growing, Medicaid is taking up more of the state’s budget, and the care workforce that holds the system together is understaffed, underpaid, and undertrained,” the report said. “These are not separate problems.”