The Affordable Care Act (ACA) hasn't been very well received in conservative circles since it was signed into law six years ago. Many GOP-dominated states are at odds with provisions of the law, if not its basic premise: that government should be more involved with health insurance because it can contain costs and improve the quality of care. One provision in particular that has proved controversial is Medicaid expansion. The ACA as written forced states to take part in the expansion of Medicaid or risk losing federal funding. In 2012, the U.S. Supreme Court ruled that forcing states to adopt this policy was unconstitutional. This made Medicaid expansion a voluntary action on a state-by-state basis. There are currently 32 states that have adopted the expansion, and a handful still considering it. Even though Governor Mary Fallin initially rejected Medicaid expansion in November of 2012, Oklahoma is now amongst the states that are considering an expansion. If Oklahoma lawmakers agree to expand Medicaid, they will join other Republican states that ended up expanding Medicaid, including Tennessee, Arkansas, and Utah.
Oklahoma legislators are calling the proposal “Medicaid Rebalancing”. The plan promises to bring federal money to Oklahoma without a net increase in Medicaid enrollment numbers. The Oklahoma Health Care Authority proposes moving 175,000 people off of state Medicaid into Obamacare's private insurance markets. This is to make room for new Medicaid enrollees. If the Obama administration and the state approve the plan, the federal government will foot 90 percent of the Medicaid bill of these new enrollees. In order to fund the state’s 10 percent share of the cost, Oklahoma will add a $1.50 tax on each pack of cigarettes sold in the state.
Why did Oklahoma have such a serious change of heart when it comes to Medicaid expansion? Craig Jones, the President of the Oklahoma Hospital Association, told the Insurance Journal, "We are nearing a colossal collapse of our health care system in Oklahoma…we have doctors turning away patients. We have people with mental illnesses who are going without treatment. Hospitals are closing, and this is only going to get worse this summer if the Legislature does not act immediately to turn this around."
Oklahoma is facing a $1.3 billion hole in their budget that threatens to do serious damage to the state’s health care system. This huge budget deficit would force Oklahoma’s Medicaid agency to make cuts to physician reimbursements of up to 25 percent. These cuts would ultimately force nursing homes, and hospitals to close. Providers wouldn’t be able to afford to treat their Medicaid patients.
Rural areas and women would be acutely affected. Many rural health care providers would either have to relocate to more populous areas or close their doors. For example, the delivery of the vast majority of babies at McCurtain Memorial Hospital in rural Idabel, Oklahoma are billed to Medicaid. If the state cuts Medicaid reimbursements by 25 percent, McCurtain Memorial would be forced to close. This would leave many women without a feasible option for delivering babies, without driving many miles, potentially endangering them and their babies.
There are numerous individuals and groups in Oklahoma that oppose the OHCA’s Medicaid Rebalancing plan. Two groups not in favor are political advocacy groups the Oklahoma Council on Public Affairs, and Americans for Prosperity. The Oklahoma Council on Public Affairs objects to the proposal because of its lack of specific details, because it puts hundreds of thousands of able-bodied Oklahomans on Medicaid (making it Medicaid expansion regardless of what it’s called), and because the costs will likely be much greater than estimated.
It remains to be seen whether the Oklahoma Health Care Authority's proposal will be adopted in some form or another, but what is clear is that the status quo is not sustainable. Major changes of one type or another are needed to stabilize Oklahoma’s health care system.