STRS Ohio Legislative News

Ohio Retirement Study Council Cancels May Meeting; Budget Bill a Work in Progress

At the call of the Chairman, Sen. Kirk Schuring (R-Canton), the Ohio Retirement Study Council (ORSC) canceled its meeting that had been tentatively scheduled for May 9. A June meeting is expected as the members will have the Council’s budget before them for approval. That meeting is tentatively scheduled for June 13.

Though ORSC is not meeting in May, the six Council members who serve in the General Assembly are working toward the enactment of the state’s biennial operating budget — Sub. House Bill 166. Introduced in March by Rep. Scott Oelslager (R-North Canton) who chairs the House Finance Committee, the roughly $70 billion appropriations legislation initially embodied the recommendations of the DeWine administration. The substitute version of the bill reflects changes made in the House, including an increase in the minimum teacher salary to $30,000 from $20,000. This change is not likely to have a major impact on STRS Ohio, as the Ohio Association of School Business Officials estimated that few, if any districts pay less than that amount. The House Finance Committee passed Sub. H.B. 166 on May 8 by a rare unanimous vote, with the full House expected to begin its consideration of the bill on May 9. Informal hearings on the bill began in the Senate several weeks ago.

Once the Senate completes its work on the bill, it will likely be sent to a conference committee to work out differences between the House- and Senate-passed versions. The goal is to have the budget to the governor before the end of the current biennium, otherwise an interim budget is required. While STRS Ohio does not receive appropriations via the state biennial budget, there have been instances when the system or other parties sought to make changes to the governing statutes (Ohio Revised Code section 3307) by using the budget as a vehicle. As such, STRS Ohio Governmental Relations staff monitors the budget for the potential inclusion of language affecting the system.

Congressional Budget Office Releases Analysis of Trump Administration Rebate Proposal Showing Increased Costs to Medicare, Medicaid

In April, it was reported that The Public Sector Health Care Roundtable had provided comments on a rule proposed by the U.S. Department of Health and Human Services (HHS) relative to rebates negotiated by pharmacy benefit managers. STRS Ohio was a founding member of the Public Sector Health Care Roundtable and continues to be a member of the organization. In part, the Roundtable comments expressed concern that the HHS proposal would lead to substantially higher costs in Medicare Part D for public sector retirees and their families and recommended the existing safe harbor for rebates negotiated between drug manufacturers and pharmacy benefit managers contracting with Medicare Part D plans be left in place.

With respect to that proposed rule, the Roundtable reported during the week of May 6 that the Congressional Budget Office (CBO) released a new analysis of the HHS proposal to eliminate rebates in Medicare Part D and Medicaid managed care. That CBO analysis claims that Medicare spending would increase by $187 billion and Medicaid by $7 billion over the next decade if the rule to get rid of the safe harbor for rebates for these drugs is finalized. At the time of the writing of this report, it is uncertain to what extent the CBO analysis will affect the fate of the proposed rule. STRS Ohio Governmental Relations staff will continue to monitor and report on developments.

Appendix

View a report from the National Association of State Retirement Administrators (NASRA) on reforms to public pension plans in progress around the country. We will include this report monthly as part of the Legislative News.