INSPIRED by an Arkansas initiative, two Republican lawmakers in Oklahoma want to use federal dollars intended for Medicaid expansion to instead buy private insurance for lower-income residents.
Private insurance is preferable to Medicaid coverage, so the proposal by Rep. Doug Cox and Sen. Brian Crain has some appeal. It could cover up to 150,000 citizens without a welfare program crowding out private insurance. Plus, the proposal calls for work incentives and co-payments, which could deter overutilization and abuse. That's another selling point.
Given that Cox, R-Grove, is an emergency room doctor, there's no doubting his concern for the uninsured or his commitment to addressing Oklahoma's health care problems. In trying to develop a compromise on Medicaid expansion, he and Crain, R-Tulsa, are tackling a major issue that may win them few friends. That's commendable.
But despite their plan's positives, several problems remain. First and foremost, the proposal still requires state dollars that could be used for other things like schools, roads and public safety. Under Obamacare, the federal government is expected to cover 100 percent of the cost of Medicaid expansion (or alternatives) for three years and 90 percent in subsequent years. But that 10 percent can be substantial.
Costs going up
Cox says the state can redirect about $50 million annually in tobacco tax money that is now going to Insure Oklahoma, which is being phased out, to cover the state's share. But the tobacco tax funds may not be enough. It's been estimated Oklahoma's state share could run as high as $1.5 billion over the first seven years under Obamacare. And even without direct expansion, existing Medicaid costs are expected to significantly increase.
From a philosophical standpoint, the plan also requires the Republican-controlled Legislature to tacitly endorse increased federal spending. The 90 percent federal match Oklahoma receives will contribute to federal deficit growth and national debt. Writing in The Wall Street Journal, Goldwater Institute policy analyst Christinia Corieri recently noted that states opting out of Medicaid expansion so far (including Oklahoma) have effectively reduced federal spending by $424 billion over the next eight years. Many Oklahoma lawmakers have railed against federal spending and Obamacare. To embrace both, even indirectly, could be politically devastating.
Then there's the problem of trusting the federal government. The Cox-Crain plan requires a federal waiver. What's to stop the federal government denying a waiver and requiring straight Medicaid expansion in future years?
There's no guarantee the federal government will actually provide the 90 percent match. Corieri points out that the Obama administration has already twice proposed cutting funding to states in its 2011 and 2012 budget proposals. U.S. Sen. Tom Coburn, R-Muskogee, recently noted that when the Individuals with Disabilities Education Act passed, the federal government promised to cover 40 percent of its cost. States never received more than 21 percent.