Gov. Mary Fallin has stated her opposition to expanding Medicaid health care to about 470,000 people in Oklahoma. All of these people have incomes of less than $14,859 a year or $1,238 a month (133 percent of poverty).
Here are four reasons why the governor should reconsider her position:
If Oklahoma expands Medicaid to these people in 2014, then for three years the federal government will pay 100 percent of all Medicaid costs for all 470,000 people and will pay slightly less in years four to seven. Basically, for the next seven years it is fully federally funded without a significant financial downside for the state.
If the state agrees to expand its programs, then by 2019 Oklahoma will get more than $13.4 billion in federal funds in return for spending $789 million in state dollars.
A ratio of 13,400 to 789 is a terrific rate of return on state funds and a great federal financial stimulus. Why would Fallin refuse this guaranteed return on investment, which is far better than the existing Medicaid federal match?
Think about the financial downside if the governor refuses to participate. Oklahoma's citizens will still pay the same amount of federal taxes, but other states will benefit from federal taxes because they've agreed to expand their Medicaid services.
When Congress passed the Affordable Care Act, it eliminated the “disproportionate share hospital payments” (DSH) to hospitals that had cared for the bulk of uninsured 470,000 low-income people. DSH payments were the federal incentive for hospitals to care for the same 470,000 people the act presumed would become Medicaid recipients in 2014.
Without the DSH payments, hospitals will still be legally required to provide hospital treatment for these low-income patients. However, the hospitals won't get any Medicaid reimbursement for treating these patients because the people won't be in Medicaid — neither the higher reimbursement DSH payments that hospitals had received nor even regular Medicaid reimbursements for hospital care.
Without DSH, the state will also be in trouble. Lost DSH payments are huge. Without DSH payments, Oklahoma will lose about $49 million of its Medicaid budget per year.
This is a train wreck waiting to happen — for low-income patients and the hospitals. The bottom lines seem clear: Expand Medicaid for the 470,000 poorest citizens, get a terrific rate of return and avoid a hospital disaster.
Gold is an attorney in Philadelphia who has brought numerous lawsuits related to Medicaid and to the Americans with Disabilities Act.