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Proposed Medicaid plan could prove costly to Oklahoma

by The Oklahoman Editorial Board Published: July 7, 2013

A Leavitt Partners report recommends Oklahoma accept Obamacare's federal Medicaid expansion funds and use the money to buy private health insurance policies for low-income, uninsured citizens.

There's reason to believe the proposal would be far more expensive than predicted. Buried in the report, it's noted proposed rules would mandate that Medicaid enrollees face a maximum co-payment of only $8 for nonemergency use of the emergency room. This would hardly deter using the ER for routine care, which increases taxpayer costs.

Because the Leavitt plan would use Medicaid dollars to purchase private coverage, some may think the $8 co-pay won't apply. Wrong. This spring, the federal Centers for Medicare and Medicaid Services declared that under alternative Medicaid programs “beneficiaries remain Medicaid beneficiaries and continue to be entitled to all benefits and cost-sharing protections. States must have mechanisms in place to ‘wraparound' private coverage to the extent that benefits are less and cost sharing requirements are greater than those in Medicaid.”

In other words, any private insurance plan purchased with Medicaid dollars must provide benefits equal to Medicaid — including strict limits on co-payments.

And the Leavitt report notes the target population of currently uninsured citizens has higher rates of smoking, heavy drinking, obesity, serious mental illness, serious psychological distress and substance use disorders than Oklahoma's current Medicaid population.

Some of these conditions are the result of personal behaviors, not a lack of insurance. So the Leavitt report suggests providing incentives for healthier behavior, such as lower co-payments. But will cutting an $8 co-pay to $6 really cause people to quit smoking, exercise and eat healthy foods?

The Leavitt report predicts Oklahoma taxpayers will pay $850 million over 10 years for the alternative Medicaid plan, but suggests new jobs “created” by government spending and associated tax revenue, as well as alleged reductions in other state health expenditures, will offset that cost and ultimately save more than $400 million.

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by The Oklahoman Editorial Board
The Oklahoman Editorial Board consists of Gary Pierson, President and CEO of The Oklahoma Publishing Company; Christopher P. Reen, president and publisher of The Oklahoman; Kelly Dyer Fry, editor and vice president of news; Christy Gaylord...
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