OCPA column: Ducking the real Medicaid question

Ducking the real Medicaid question

by Jonathan Small

When it comes to Medicaid expansion, there are just two choices. Oklahoma can expand the program, adding up to 628,000 able-bodied adults at a potential state-taxpayer cost of $374 million annually, or Oklahoma can reject expansion and implement real, state-level reforms that target funding to rural areas, expand price transparency and improve outcomes.

There is no serious, viable alternative that melds those two positions, as recent news from Utah makes clear.

Under the Affordable Care Act, better known as Obamacare, the federal government offers to pay up to 90 percent of the cost of adding able-bodied adults to Medicaid, a much higher rate than it pays for coverage of the aged, blind and disabled currently on the program. This was done to incentivize states to expand the welfare program.

Utah officials tried to split the baby. Under Obamacare, the higher matching rate is provided for coverage of able-bodied adults with incomes up to 138 percent of the federal poverty level. Utah tried to do a partial expansion covering only those with incomes up to the poverty level. The Trump administration declined Utah’s waiver request. Basically, if Utah wants to do a partial expansion, it can, but it will receive the lower matching rates provided through traditional Medicaid. Utah will cover about 30 percent of the costs instead of 10 percent.

Oklahoma lawmakers should take note. Under the federal law, as enforced now by both Democratic and Republican administrations, Medicaid expansion is an all-or-nothing proposition.

Yet some proponents of Medicaid expansion argue they can create an “Oklahoma plan” that expands Medicaid in a modified form. That argument no longer holds water after rejection of Utah’s plan.

The blunt truth is that when “alternative” Medicaid-expansion models have gained approval from the federal government, they still provide coverage to the same people as traditional Medicaid expansion, with the same lack of restrictions as traditional expansion, at the same or higher taxpayer costs as traditional Medicaid expansion.

Some tout Arkansas’ Medicaid expansion as a model for Oklahoma, but the main difference between the Arkansas plan and traditional Medicaid expansion is that the Arkansas plan is much more expensive. One study found the Arkansas plan’s per-patient costs were more than double the cost of traditional Medicaid.

Efforts to place Medicaid expansion on the ballot and make it a constitutional right for able-bodied adults are underway, and signatures are being gathered. Some lawmakers argue this means they must pass expansion through the Legislature. In reality, the initiative petition has taken the issue out of lawmakers’ hands. The ballot measure, if approved, will supersede anything the Legislature passes. And if the ballot measure is rejected—either because the petition fails to secure enough signatures or voters reject it at the ballot box—then it’s clear Oklahomans don’t want to expand Medicaid.

Oklahoma politicians only need to declare their position on the ballot measure. Those who pretend they’re seeking an “alternative” are simply ducking the question.

Jonathan Small serves as president of the Oklahoma Council of Public Affairs.