GOV. Mary Fallin's rejection of two components of Obamacare — establishing a state-run health exchange and expansion of Medicaid — is significant but hardly unexpected.
We've generally supported the concept of a state-run exchange, believing local control is better than federal control. The concept for the exchanges originated with a conservative think tank. The idea has merit.
However, Fallin and many other governors argue federal guidelines are so restrictive that only the appearance of state control is provided. President Barack Obama has shown little willingness to compromise in the past, so it's understandable that some governors would be skeptical of sudden new promises of “flexibility” on his signature initiative.
The danger for governors is that their implementation of state exchanges could ultimately put them, rather than the federal government, on the hook for Obamacare's failures. It's no surprise many aren't rushing to accept that offer.
We've been wary of the Medicaid expansion because the existing program's costs have steadily increased over the past decade and some officials think its trajectory is already unsustainable. The Kaiser Commission on Medicaid and the Uninsured has estimated Oklahoma's Medicaid enrollment could increase as much as 67 percent under Obamacare, which would likely make a bad fiscal situation worse.
The federal government has promised to cover the full cost of expansion for three years and cover no less than 90 percent thereafter. But it would be naive to put faith in Washington's financial commitment, given the nation's already precarious fiscal standing.
Fallin's critics should also keep in mind that every state dollar directed to Medicaid expansion is money that won't support schools, roads or public safety.
The Obama administration is already pushing for $1.6 trillion in tax increases over the next decade, but this wouldn't come close to bringing the nation's fiscal house in order — and that's without the added cost of Obamacare. Medicaid expansion could very well result in even higher taxes for Oklahomans down the line, and Obamacare's benefit to health care remains questionable. An estimated 30 million will remain uninsured under Obamacare, according to Congressional Budget Office projections.
In opposing state exchanges and Medicaid expansion, Fallin is in good company. Louisiana Gov. Bobby Jindal has also rejected both, and Jindal is known for health care policy expertise. In the 1990s, he served as secretary of the Louisiana Department of Health and Hospitals. Jindal helped Louisiana's Medicaid program avoid bankruptcy while increasing childhood immunizations, raising Louisiana to third-best in health care screenings for children and offering new and expanded services for elderly and disabled persons. His record shows that Jindal is no knee-jerk opponent of aid for the poor.
Fallin's decision will no doubt put many hospitals in a tough spot since their business model now depends substantially upon federal money through Medicaid and Medicare — and Obamacare cuts $1.6 billion in Medicare payments to Oklahoma hospitals through 2020. Cost-shifting from the uninsured will remain a challenge as well.
We hope Fallin follows through on her promise to promote meaningful state-level health care reforms this year. The status quo is just as unsustainable as Obamacare. State government must now take the lead in addressing the very real health care problems facing Oklahomans.