Gov. Mary Fallin's decision Monday not to expand Medicaid coverage was cheered by fellow Republicans but denounced by those who had hoped to see expanded medical care for thousands of poor Oklahomans.
“Such an expansion would be unaffordable, costing the state of Oklahoma up to $475 million between now and 2020, with escalating annual expenses in subsequent years,” Fallin said in a statement. “It would also further Oklahoma's reliance on federal money that may or may not be available in the future given the dire fiscal problems facing the federal government.”
Those figures were quickly disputed. The Oklahoma Policy Institute said expanded Medicaid could ultimately cost the state $28 million to $37 million a year in 2020.
The Affordable Care Act, the federal health care law that some call Obamacare, originally mandated that states, beginning in January 2014, expand Medicaid to cover people younger than 65 with income below 133 percent of the federal poverty level.
But in June 2012, the U.S. Supreme Court struck down, among other things, the part of the Affordable Care Act that penalized states for not expanding Medicare. This meant that states had a choice.
Currently, state Medicaid programs provide health coverage for lower-income people, families and children, some adults older than 65, and people with disabilities. About 597,000 Oklahoma residents are uninsured.
Fallin is one of many Republican governors who have opposed the expansion. Monday, Fallin said that expanding Medicaid would create massive new costs that would require cuts to other government entities, such as education and public safety.
“We are very conscientious of the fact that there are Oklahomans that don't have health care coverage, we are certainly very aware that many people show up at emergency rooms and hospitals have to pick up that cost,” Fallin said. “It's something we're working on, and actually we have began drafting proposals to look at to find ways to find solutions to reducing our health care costs.”
There are about 800,000 people enrolled in Oklahoma's Medicaid program, known as SoonerCare, according to the Oklahoma Health Care Authority. Of those enrolled, about 500,000 are children and 100,000 are dually eligible for Medicare and Medicaid.
Even though it fluctuates, about 90 percent of people eligible for SoonerCare are enrolled. There are about 50,000 people, mostly children, who are not enrolled in SoonerCare, according to the authority.
Currently, most low-income adults are not eligible for Medicaid, according to the Oklahoma Policy Institute.
Will it hurt hospitals?
David Blatt, Oklahoma Policy Institute director, said by not expanding Medicaid, Oklahoma is slamming the door in the face of the most vulnerable segment of the adult population.
“This was an opportunity to provide compensated care for a population that does tend to go without needed care until things reach emergency proportions,” Blatt said. “This is huge blow to Oklahoma hospitals, community clinics and other providers who will continue to be stuck with the cost of uncompensated care by this decision.”
Because Oklahoma chose not to expand Medicaid, many residents will fall into the “coverage crater,” unable to enroll in Medicaid and barred from getting tax credits to buy coverage in the new health insurance exchange, according to the Oklahoma Policy Institute, a Tulsa-based organization that says it promotes fair funding of state government services.
The impact of cuts to hospitals under the Affordable Care Act has been understated, said Craig Jones, the Oklahoma Hospital Association president.
“The Affordable Care Act provides expanded Medicaid coverage and subsidized private insurance to low-income people partly by reducing Medicare payments to hospitals,” Jones said in a statement. “In Oklahoma, those reductions amount to $1.6 billion through 2020, and additional reductions beyond. The reluctance to expand Medicaid here in Oklahoma means that cuts experienced by Oklahoma hospitals for patient care will be used to provide expanded coverage in other states.”
Hospitals serve as safety nets for their communities, with Oklahoma hospitals providing about $600 million annually in uncompensated care, he said.
“Without increased coverage for the uninsured, such as Medicaid expansion would provide, these costs are shifted to businesses and those who have insurance, contributing to increased health care costs,” Jones said.
An estimated 200,000 uninsured adults would qualify for Medicaid if it were expanded in Oklahoma to include adults below 133 percent of the poverty level, according to the health care authority.
Under Medicaid expansion, the federal government would pay for 100 percent of the state's cost of covering newly eligible enrollees for the first three years, from 2014 to 2016.
After 2020, the state would have paid 10 percent of newly eligible enrollee costs while the federal government would have paid 90 percent.
If Medicaid were expanded and if all 200,000 people signed up, the state's share in 2020, with the federal government matching 90 percent of the cost, would be about $57 million, plus about $8 million in administrative costs.
Support for decision
Meanwhile, the Oklahoma Council on Public Affairs, a conservative think tank, supported Fallin's decision to not expand Medicaid, arguing that states would be “left to pick up the tab for any well-intended, but shortsighted expansion of the program.”
“With the expansion, the cost of the program to Oklahoma taxpayers by 2023 would have been roughly $6.5 billion — almost the exact amount of the entire current state-appropriated budget,” Michael Carnuccio, the organization's president, said in a statement.