04/16/2026

State Lawmakers Propose Overhaul of Medicaid Managed Care

A group of Ohio lawmakers are advancing a proposal to significantly restructure the state’s Medicaid system, replacing managed care organizations (MCOs) with a simplified administrative model they say could reduce costs and improve transparency.

Sens. Louis Blessing (R-Cincinnati) and Beth Liston (D-Dublin) this week introduced Senate Bill 386, the “Medicaid Savings Act,” which would shift the program to an administrative services only (ASO) model. Under this approach, vendors would be paid a set fee to administer Medicaid, rather than taking on financial risk as MCOs do today.o’s recent pharmacy benefit manager (PBM) reforms—and similar changes in Connecticut—as evidence that streamlining Medicaid can generate savings while increasing provider participation and directing more dollars to care.

Liston, a physician, emphasized that Ohio’s current system is highly complex, with multiple plans, varying requirements, and administrative hurdles that can burden providers and limit access for patients. She argued that past efforts to simplify Medicaid, such as adopting a single PBM, have made the system work better for both providers and beneficiaries.

Lawmakers on the Senate Medicaid Committee raised issues including federal approval requirements, how savings would be used, and how patient outcomes would be measured. The bill would establish a working group to address transition details.

A companion bill, House Bill 780, has been introduced in the House by Rep. Karen Brownlee (D-Cincinnati), and sponsors plan to continue discussions on the proposal in the coming weeks.