With Medicaid expansion approved, what happens next?
OKLAHOMA CITY — Oklahoma voters on Tuesday approved a state question to expand Medicaid, but legislators won’t decide until next year how to pay for the expansion.
State Question 802 requires the state to expand Medicaid by July 1, 2021 — the start of the next fiscal year.
Legislators won’t figure out how to fund the state’s 10% share of the expansion until the 2021 legislative session kicks off in February.
The Oklahoma Health Care Authority estimated earlier this year that Medicaid expansion, under the first year of Gov. Kevin Stitt’s SoonerCare 2.0 plan, would have covered just over 200,000 Oklahomans and cost $164 million annually.
However, the agency plans to update those approximations to get better enrollment figures and cost estimates for implementing State Question 802.
“There will likely be updates due to timing and programmatic differences,” said a spokeswoman for the agency.
The agency has no timeline for when those estimates will be complete. Those figures, in addition to a state budget outlook presented at a December meeting of the Board of Equalization, will help guide lawmakers in funding the expansion.
In his attempts to sway voters against the state question, Stitt said the state could face a $1 billion budget deficit in the next fiscal year. But with the volatility of the oil markets and no end in sight for the COVID-19 pandemic, it is hard to know what state coffers will look like in six months or a year.
Stitt warned the only two options to pay for the expansion would be to raise taxes or cut government services.
“The Legislature will have a really tough job if 802 passes,” he said.
But some lawmakers are more optimistic about funding options.
Sen. Greg McCortney, R-Ada, pointed to legislation passed this year to increase a hospital fee to cover a majority of the expansion. Stitt vetoed the bill, saying it fell short of his expectations.
“For two years now, we’ve had a proposal for how you fund Medicaid expansion that did not include tax increases, did not include cuts to education, all of those things that we are now being told will have to happen,” McCortney said. “So I’m still very hopeful that we can go back to the funding plan that we’ve had all along, and that could be the cornerstone to how we do this without damaging the rest of the state’s budget or increasing taxes.”
Legislators would likely need the support of the Oklahoma Hospital Association to increase the Supplemental Hospital Offset Payment Program.
The association supported SQ 802 and said it is eager to work with legislators on funding Medicaid expansion.
“We look forward to working with lawmakers on budget options to fund expansion without raising taxes,” the group said. “Ultimately, the state will benefit from savings associated with accessing enhanced federal matching funds.”
Also at play in the funding discussion is a constitutional amendment that would allow the Legislature to tap a greater portion of the annual payments to the Tobacco Settlement Endowment Trust.
The Legislature referred to the ballot a measure that seeks to reduce the amount of settlement funds going to TSET from 75% to 25%, and giving legislators control of the larger portion.
Legislators intend to use the additional money to pay for the state’s current Medicaid program and the expansion. Altogether, it would amount to roughly $70 million a year for Medicaid.
But the question that will appear on the ballot as State Question 814 and likely come up for a statewide vote in November has been rebuked by some health care organizations that say this would be a blow to Oklahoma’s tobacco control and prevention efforts.
Senate Pro Tem Greg Treat, R-Oklahoma City, also pointed to Senate Bill 1046, the main funding mechanism for Stitt’s Medicaid expansion plan, as a possible starting point for funding discussions.
“We’ll have to go back to the drawing board and see where we’re at, and that won’t happen until next session, although we’ll be talking about it all interim,” he said.
Last year, legislators formed a health care working group to take a deeper look at Medicaid expansion and improving the state’s health outcomes. Asked if a similar working group might be formed to discuss funding SQ 802, Treat said it’s possible.
In order for Oklahoma to expand Medicaid, the Health Care Authority will have to submit to the federal government a state plan amendment seeking to expand Medicaid.
The Health Care Authority submitted a similar state plan amendment this spring, but that was withdrawn after Stitt scrapped his plan to expand Medicaid this year.
SQ 802 enshrines Medicaid expansion in Oklahoma’s constitution, meaning neither Stitt nor the GOP-led Legislature can limit or undo the expansion.