OCPA and FGA: Medicaid "rebalancing" bad for Oklahoma

'Rebalancing' proposal is wrong plan for Oklahoma

by Jonathan Small and Jonathan Ingram

The Oklahoma Health Care Authority has proposed to “rebalance” our state Medicaid system, supposedly to better serve the poor. Unfortunately, a closer look at the plan reveals that it's just another attempt to backdoor an unaffordable Medicaid expansion.

OHCA has provided few specifics about its plan, but we do know the basics. First, “rebalancing” would create a new health insurance entitlement for up to 628,000 able-bodied adults. OHCA says that only 175,000 would be added to the rolls, but in states that have already undergone “rebalancing,” actual new enrollment surpasses projections by an average of 91 percent. In fact, OHCA's own consultants have estimated as many as 628,000 able-bodied adults would be eligible under this plan.

A study by the Lewin Group, a prestigious health policy consulting firm, found that more than half of those new Medicaid clients under the “rebalancing” plan are already covered by private insurance plans, most of them job-related. They aren't uninsured at all.

Worse still, Oklahoma's Medicaid program already has a lengthy waiting list for truly needy children and adults with intellectual and developmental disabilities who have been waiting — for a decade in some cases — to receive Medicaid services. So this “rebalancing” would shift hundreds of thousands of already insured Oklahomans onto Medicaid while telling the most vulnerable to step aside.

OHCA also proposes to deliver Medicaid services to these new enrollees through commercial health plans, which is doublespeak for implementing the Affordable Care Act expansion that our policymakers have already rejected. Other states that have followed this path found that shifting Medicaid patients to the exchange cost almost twice as much as simply broadening Medicaid.

OHCA suggests a trade-off: shifting some 175,000 higher-income pregnant women and children off Medicaid and onto the exchange three years from now. But recall that all but one exchange health care provider have already pulled out of Oklahoma due to prohibitive losses. Who will underwrite this new coverage?

OHCA has an answer: You will. The proposal is vague, as all plans for tax increases tend to be, but the agency has hinted at a combination of higher tobacco taxes and taxes on health care providers, which would inevitably be passed along to patients. This new revenue would be used to increase Medicaid provider rates, which already rank the 13th highest in the country.

To hear OHCA talk, one would think the state denies health care to hundreds of thousands of Oklahomans. Yet Medicaid has already grown exponentially through the years. Twenty years ago, our state paid $315 million for Medicaid. In 2015, state taxpayers paid $2 billion to fund a program that now serves more than one out of every four Oklahomans.

In order to protect core services, and more importantly our state's most vulnerable, lawmakers should heed Gov. Mary Fallin's warning in 2014. “Both the president's (Medicaid expansion) plan and alternative proposals that rely on federal dollars in the Affordable Care Act amount to the same thing: a dramatic growth in unsustainable government spending.”

Small is president of the Oklahoma Council of Public Affairs. Ingram is vice president of research at the Foundation for Government Accountability.