Oklahoma's Medicaid program will have $50 million less in federal money to serve low-income residents in the coming fiscal year.
The reduction in federal money is, in part, because Oklahoma's economy has improved, health leaders said Thursday.
The amount of money that the federal government provides each state for Medicaid, including Oklahoma, is based on a formula that incorporates a state's per capita income.
Nico Gomez, the Oklahoma Health Care Authority CEO, said it's good news that Oklahoma's economy is doing well and that the state's per capita income has improved, but it does result in the reduction of federal money for the program.
“The logic behind that is Medicaid is a state and federal partnership — both governments put in dollars to support the program,” Gomez said. “And there's the federal government saying, ‘If your economy is doing well, there's going to be fewer people who need the program so we don't need to send you as much federal dollars to support it.'”
The Oklahoma Health Care Authority administers SoonerCare, the state's Medicaid program that provides health care services to low-income children and some adults. About 792,000 Oklahomans, including 511,000 children, are enrolled in SoonerCare.
Agency officials learned about the reduction last week. Because of the federal government's partial shutdown, the agency doesn't have formal confirmation of the reduction. However, Gomez said he believes that's the number they can expect.
At the authority's board meeting Thursday, board member Tony Armstrong expressed concern about the reduction.
“We have to come up with a lot of money in a very short amount of time, and it's going to be difficult, but we've been through this before,” Armstrong said during the meeting.
The amount of money that the Oklahoma Health Care Authority gets from the federal government for Medicaid is based off a formula known as the Federal Medical Assistance Percentage, or FMAP.
The Federal Medical Assistance Percentage determines the federal share of the cost of Medicaid services in each state, according to the Henry J. Kaiser Family Foundation.
The lower a state's per capita income, the higher the state's Federal Medical Assistance Percentage, or federal Medicaid matching rate, according to the foundation.
Because of the reduction, the Medicaid program has to adjust — either the money is made up by increasing state money or by reducing the spending of the program, Gomez said.
Gomez said he wouldn't speculate about whether people would lose services because of the federal funding cuts.
“I don't want to create a panic,” Gomez said. “It's early on. We're talking about a budget that's effective July 1 of next year, but I'd rather start talking about it now than May. I think it's prudent for us to start this conversation now instead of trying to figure out the ‘Now what?' in May.”
The reduction doesn't just affect the Oklahoma Health Care Authority. Overall, the reduction in the Federal Medical Assistance Percentage will result in a $66 million reduction across multiple state agencies that bill for Medicaid services, including the authority and the state Health Department.
Gomez said before the reduction, the federal government was paying 64 cents for every dollar spent toward Medicaid, with Oklahoma paying 36 cents. But with the reduction, the federal government will pay 62 cents for every dollar.
“Now the state has got to decide, ‘OK, do we keep our portion the same, and make some reductions, or do we find another two cents to replace the lost federal funds to keep that same dollar of service that we're buying?'” Gomez said.
We have to come up with a lot of money in a very short amount of time, and it's going to be difficult, but we've been through this before.”
Oklahoma Health Care Authority