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Gov. Mary Fallin's decision against Medicaid expansion rejects billions in federal aid

Oklahoma Gov. Mary Fallin also rejected arguments that federal money would boost economic activity in the state, though the state hospital association estimates nearly 10,000 direct and indirect jobs
by Chris Casteel Modified: November 20, 2012 at 8:27 pm •  Published: November 21, 2012
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In deciding against expanding Medicaid in Oklahoma, Gov. Mary Fallin rejected an estimated $3.6 billion in federal funding over seven years, along with the argument that the additional money would generate jobs while improving the health of the poor.

Fallin's spokesman stressed Tuesday that — no matter how much money the federal government contributed for an expansion — the state ultimately would not be able to afford its share of a larger Medicaid program without cutting funding for other essential services, such as education and highways.

The governor's office is already anticipating much higher Medicaid bills beginning in 2014 because the health care law's individual mandate, the requirement that most people have health coverage, is expected to increase enrollment of thousands of Oklahomans who are currently eligible for the program but not participating.

In fact, the costs associated with those people make up more than half of the $475 million in additional state obligations cited by Fallin on Monday when she announced her decision not to expand Medicaid eligibility to an estimated 200,000 uninsured adults.

“The Oklahoma Health Care Authority is expecting an increase in the number of people who are currently qualified for Medicaid coverage but not participating in the program to go ahead and enroll,” Jo Kilgore, spokeswoman for the authority, said Tuesday. “This is based on the assumption that the individual mandate will cause more qualified people to enroll to avoid potential penalties.”

The decision not to expand Medicaid — announced by the governor on Monday — means some portion of those who would have been newly eligible will now have to purchase private insurance or face penalties.

Enrollment, funding

In weighing the financial implications of expanding Medicaid eligibility, the governor assumed that 100 percent of the people already eligible would sign up for Medicaid when the Affordable Care Act mandates that most people have insurance. And she assumed that 100 percent of those eligible under a Medicaid expansion would sign up.

According to the Oklahoma Health Care Authority, there are 44,000 children and 17,000 low-income parents who are now eligible but not participating.

And there would be 200,000 uninsured adults with incomes below 133 percent of the poverty line that would have become eligible under the expansion.

If the governor's assumptions about enrollment were correct, the state's Medicaid bill would rise by $46 million in 2014 and be $103 million higher in 2020.

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by Chris Casteel
Washington Bureau
Chris Casteel began working for The Oklahoman's Norman bureau in 1982 while a student at the University of Oklahoma. After covering the police beat, federal courts and the state Legislature in Oklahoma City, he moved to Washington in 1990, where...
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