Oklahoma currently ranks near the bottom among states in terms of wellness. Both opponents and advocates of an expansion of the state’s Medicaid program say action is required to improve the state’s health.
Fallin and other state leaders have said an expansion is cost-prohibitive, while those who favor it — including hospital and business organizations — argue that it actually would save money in the long run.
Under the Affordable Care Act, also known as Obamacare, states have the option to expand Medicaid to allow coverage for individuals who make up to 133 percent of the federal poverty level. The expansion would allow a family of four making up to $31,322 a year to be eligible for medical coverage.
To help pay for the expansion, the ACA makes deep cuts to what is known as Disproportionate Share Hospital (DSH) programs, which reimburse hospitals for medical care provided to uninsured people.
In Fallin’s State of the State address, the governor cited an estimate by the Kaiser Commission on Medicaid and the Uninsured that Medicaid expansion would cost Oklahoma $690 million between 2013 and 2022.
“Expanding Medicaid as proposed by the president would mean that a huge sum of money would be diverted from other priorities, like education and public safety, as well as existing health care programs,” Fallin said.
Her stance has attracted its share of detractors.
The day after the State of the State, around 300 people rallied outside the state Capitol and presented a 5,000-signature petition to the governor’s office calling for Fallin to reverse her position.
State Rep. Doug Cox, R-Grove, who spoke at the rally, is one of few Republican legislators to publicly support the Medicaid expansion. An emergency room physician, he credited Fallin with being supportive of improving Oklahoma health care but said he disagrees with her on Medicaid.
He noted that Oklahomans’ tax dollars will help subsidize Medicaid expansion in other states. Cox said failure to expand here would be devastating for hospitals, especially those in rural areas. The Oklahoma Hospital Association estimates that hospitals statewide will lose around $1.6 billion in funding between 2014 and 2020 because of cuts in DSH and Medicare unless those funds are replaced through other means.
Under the ACA option, the federal government would cover Oklahoma’s expansion costs until 2016. At that time, the state would be required to pay up to 10 percent of the expanded cost.
If funding turns out to be overly burdensome, Cox said, the state can drop out of the program.
“There seems to be an aversion nowadays to taking that nasty, dirty federal money,” he said. “That nasty, dirty money is our tax dollars. We have no aversion to get our tax money back in roads and bridges.”
If there is a reversal of the current policy, Cox said, it’s not likely to come this legislative session. And in Oklahoma, where Obama failed to win a single county in either of the last elections, there is little political interest in cooperating with the ACA.
“I’m hoping we’ve seen the door crack a little bit,” Cox said, noting that some Republican governors are allowing for the expansion. “The fact that some other folks have done it might make it a little easier.”
According to the Kaiser Commission, Oklahoma would spend nearly $690 million over a 10-year period for the expansion, but it would also save on reimbursements for uninsured care, which is expected to be around $205 million.
In addition, expanding Medicaid would also likely save money in other areas not quantified by the report, such as health care spending by other state agencies. Without expansion, the state would miss out on $8.5 billion in federal funds between 2013 and 2022.
Terry Cline, state health commissioner, said Fallin has directed the state Department of Health to develop a plan with three objectives: improve health outcomes, bend the cost curve of medical services and reduce the number of uninsured.
The state has contracted with Leavitt Partners, a Utah-based company headed by former U.S. Secretary of Health and Human Services Michael Leavitt, to look at what other states are doing in order to synthesize those measures into a comprehensive health care strategy for Oklahoma.
In the process, the state will be looking at the state’s Medicaid program, SoonerCare, for ways to maximize its effectiveness. But because the state has decided not to expand SoonerCare, Cline said, that possibility will not be part of Leavitt Partners’ scope of work.
He said issues ripe for action include tobacco use, substance abuse, infant mortality rates, mental health care access and a lack of rural health care providers.
“Our current system, I think everyone is in agreement, is flawed,” Cline said. “We’re the most expensive health care system but do not have the best health care outcomes. As a state, can we address the big areas of health? Right now, the incentives aren’t lined up to do that. If we insured everyone who is uninsured in our state, that wouldn’t necessarily turn those trends around.”
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