THANKS to the U.S. Supreme Court ruling upholding Obamacare, Oklahoma state lawmakers are left with several challenges. One of the most pressing is what to do about Medicaid. The court's ruling left open the door for states to reject the Medicaid expansion promoted under the federal law without losing federal funds for the existing program.
State Rep. Mark McCullough, R-Sapulpa, recently noted to State Legislatures magazine that 204,000 people have been added to Oklahoma's Medicaid program over the past five years and the state cost had doubled over a decade. He said the “current trajectory is totally unsustainable.” And that was without the Obamacare expansion, which could make things exponentially worse.
The Oklahoma Council of Public Affairs, a conservative think tank, has estimated that Obamacare's Medicaid expansion would cost Oklahoma government an extra $11.4 billion over a decade (2014-23). On average, that's an extra $1.4 billion per year.
Its estimate is larger than most. However, OCPA not only took into account people who are currently ineligible for Medicaid who would be added, but also those eligible today who aren't enrolled. Currently, many citizens don't apply for Medicaid until they have a medical problem. The Obamacare tax penalty upheld by the Supreme Court is expected to cause more uninsured people to sign up.
The law provides a higher federal funding “match” for state revenue spent on expansion enrollees, but not for currently eligible people added to the program. In addition, those added through expansion are expected to incur higher health care costs than current enrollees, increasing program expense.
The state share for expansion enrollment starts low but gradually increases. Even if the added burden is ultimately far less than $1.4 billion per year, the additional cost could still be almost insurmountable. Oklahoma government's fiscal year 2013 budget is only $1.66 billion greater than what was spent in fiscal year 2003. Even before the national recession forced spending cuts, the state budget never grew more than $1.9 billion higher than the 2003 baseline.
Critics of public school funding note $235 million less was spent this year than at its pre-recession high point. Good luck closing the gap if Medicaid expansion is on the horizon. The same thing holds true for road funding and public safety needs.
Even if cost weren't a problem, Medicaid's provider rates are known to create cost-shifting to private insurance. Ironically, expanding the program could make private insurance more expensive and lead companies to drop employee coverage — something that's already a concern due to Obamacare's other provisions.
Rejecting Medicaid expansion isn't without risk. Writing at National Review Online, Douglas Holtz-Eakin noted that the individuals who would otherwise have been added to the Medicaid program would instead be eligible for subsidies in health care exchanges. That would then drive federal costs up, which could lead to even higher federal taxes for Oklahomans and all U.S. citizens.
Nonetheless, we think state officials should bide their time before considering any expansion of Medicaid. It could become a budget buster for schools, roads and public safety. Meantime, citizens must elect officials who will repeal this unwise, unworkable mess of a health care law.
That starts with voting Barack Obama out of office.