By Jonathan Small
A key plank of Obamacare (the federal “Affordable Care Act”) allowed states to expand Medicaid programs to include able-bodied adults and not just the medically needy.
When expansion was narrowly approved by a public vote in Oklahoma in 2020, everyone knew it would require the diversion of up to $300 million annually in state tax dollars. But advocates called that a bargain since federal tax dollars would cover 90 percent of costs.
Obviously, it meant little to the average citizen if they pay for expansion with taxes paid to the state or taxes paid to the federal government, but that’s the kind of argument that too often passes for logic in politics.
But now the folly of buying that argument is becoming even more apparent.
Critics have long warned the 90-10 split was likely to change. Now that federal officials are trying to bring spending under control, there’s a good chance the 90-10 split could be replaced by something closer to a 60-40 split. If that happens, the state cost of Medicaid expansion could surge by $500 million to $700 million per year.
Facing that scenario, state officials should place repeal of Medicaid expansion before voters. And in the meantime, they should enact any associated budget cuts solely within Medicaid. If Medicaid expansion caused the state shortfall, Medicaid should take the hit.
Medicaid expansion was supposed to save rural hospitals. It hasn’t.
A
2024 study from the Foundation for Government Accountability found hospitals losses from Medicaid increased 115 percent from 2013 to 2021 in states that expanded Medicaid, but just 6 percent in states that did not.
In 2024 the Chartis Center for Rural Health found 22 rural Oklahoma hospitals were vulnerable to closure. A larger percentage of Oklahoma rural hospitals were vulnerable to closure than their counterparts in several states that did not expand Medicaid (such as Texas, Wyoming, Wisconsin, Mississippi and Georgia).
Similarly, a 2023 report by the Center for Healthcare Quality and Payment Reform found that about half of Oklahoma’s rural hospitals were at risk of closing with nearly one-in-three at risk of “immediate” closure.
Those numbers are significantly worse than prior to Medicaid expansion.
Similarly, Medicaid expansion has produced no notable improvement in health outcomes.
In 2019, the America’s Health Ranking report ranked Oklahoma 47th out of the 50 states in health outcomes. Today, Oklahoma is … still ranked 47th. Outcomes in several non-expansion states are significantly better.
Put simply, Medicaid expansion could quickly break the state budget, has done nothing to benefit hospitals and has failed to improve health outcomes.
As Oklahomans face a potential budget shortfall caused by Medicaid expansion, they should assess if expansion has provided meaningful benefits. Any serious analysis will end with a simple one-word response: No.
