DALLAS -- Gov. John Kasich vetoed legislation that would end enrollment to the state’s extended Medicaid plan.

The legislation included as part of the state’s two year budget would freeze enrollment in the state’s Medicaid expansion starting July 1, 2018.

Kasich late Friday signed the $133 billion 2018-2019 state budget, but vetoed the Medicaid legislation. He said freezing the expansion would impede Ohio’s ability to administer health care effectively, potentially cause an estimated 700,000 Ohioans to lose their existing health care coverage, and limit resources to address behavioral health care needs of the most vulnerable Ohioans.

Ohio Gov. John Kasich has vetoed legislation that would freeze the state's Medicaid expansion.

In his veto statement, Kasich said the enrollment freeze violates federal law prohibiting states from “denying coverage to members of an otherwise eligible group.”

"We just don't think it's the right way to proceed," Kasich said.

Kasich said the expansion would bring into the state nearly $300 million Medicaid dollars for opiates that would be used on top of the $170 million allocated in the state’s budget.

To override Kasich, the House and Senate would need a three-fifths majority. Even if the legislature overrides the veto, the freeze cannot go into effect without the state first obtaining a federal waiver.

The House has a meeting scheduled for Thursday and the Senate is expected to meet the week of July 10 where they'll attempt an override vote.

Kasich also vetoed a proposal to increase taxes on health insurers that would have sent money to counties and regional bus services, replacing a sales tax on Medicaid managed care plans that end July 1. The tax would have provided about $207 million annually for six years to offset the loss of 8.25 percent of county sales tax revenues statewide.

Ohio is rated AA-plus by S&P and Fitch Ratings. Moody’s Investors Service rates the state Aa1.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.