If your priority is the education of Oklahoma’s children, you should be worried sick that SQ802, which expands Medicaid (SoonerCare), might pass on the June 30 ballot. Expansion proponents rarely address the enormous costs Oklahomans will shoulder, how we will pay for it, or other negative consequences for the state. Oklahomans should have a few questions answered before they vote.
First, are the enrollment and cost estimates for Medicaid expansion accurate? No. Many states saw twice the enrollment than expected, mostly able-bodied adults, many of whom already had insurance coverage. In Oklahoma, proponents claim the expansion population will be about 200,000 people costing Oklahoma about $200M. Actually, a study commissioned by the Oklahoma Health Care Authority in 2013 suggested up to 628,000 would have been eligible then. Now the projected price tag is over $370M. When “free healthcare” is advertised, what should we anticipate from the eligible, including those who already have insurance? And those numbers are just initial state expenses that don’t contemplate the rising costs of healthcare, nor the federal government’s habit of shifting costs to the states.
Second, how will we pay for expansion? Well, don’t count on a growing economy and tax base to cover the bill. Just this spring, a $416M revenue failure, caused by depressed oil and gas markets, and the COVID19 shutdown, resulted in using about half of the state’s savings. Furthermore, the budget for the ’21 fiscal year, which begins the day after the SQ802 vote, had a $1.3B hole in it. The legislature closed the gap with more savings, some much-criticized bonding, and a 4% average budget cut across state agencies. Education was cut about 2.5%, which meant other agencies were cut much more. Prudence suggests a similar budget picture next session. The Governor even vetoed his own funding request for SoonerCare 2.0, his less expensive version of Medicaid expansion, because staggering unemployment is rapidly swelling the non-expanded Medicaid population.
There are only a few ways to cover the bill: raise taxes (the worst thing to do during an economic downturn), raise fees (sneaky; a proposed increase in the hospital self-assessment fee will ultimately push up premiums and out-of-pocket expenses for those with insurance), redirect dedicated funds (such as those flowing into teacher, police, and firefighter pensions or into TSET from tobacco companies as part of the Master Settlement Agreement), cut Medicaid provider rates (self-defeating) and/or budget cuts. If SQ802 passes, with no funding mechanism identified, then it will be up to the legislature to figure out. Proponents say identifying funding would be “logrolling”; I say less than four years ago, another constitutional question, SQ779, proposed a 1% sales tax to fund education and teacher pay raises.
Third, what about “bringing home” federal tax dollars, and the bargain of a nine-to-one federal-to-state match? Pro-expansion supporters often point to this, but federal costs will shift to Oklahoma and the other states soon enough. Consider what the OHCA’s annual reports tell us about the existing Medicaid program. From 2003 to 2018, Oklahoma’s share of Medicaid expenses grew from $715M to $2.2B. At the same time, enrollment grew from 649,000 to more than a million. That’s three times the cost for less than twice the people. Furthermore, in 2003, Oklahoma was responsible for 29.9% of total Medicaid costs. In 2018, that number was 41.8%. With that track record, the 9:1 match from the feds will become 8:2, then 7:3, and so on. Regardless of who is correct on the initial expense, with an increasing federal debt and deficit spending, does anyone think they won’t continue to shift more and more costs to Oklahomans in the future? Obamacare was designed to incent states to expand their Medicaid programs by offering a higher match rate for new populations that the traditional (current) Medicaid population, but “bait and switch” takes on a new meaning here.
Fourth, since SQ802 adds Medicaid expansion to Oklahoma’s Constitution, will we have the flexibility to adapt if the projections are wrong? No, it would add a feature of Obamacare to our already bloated state constitution, never to be altered again except by another vote of the people, meaning Washington DC will control the program, and how much we’ll spend. e’ll Fifth, how will Medicaid expansion affect Oklahomans with private insurance coverage? Not in a good way. About 60% of the population targeted by expansion already has insurance coverage, and about 10% already qualify for tax-payer subsidized health insurance through the Obamacare exchange. Many will be forced out of their private plans. Insure Oklahoma, an innovative program that uses state, employer, and employee contributions to provide private insurance, will be destroyed.
As these Oklahomans drift into Medicaid dependency, other Oklahomans will pay the price, and not just in taxes. Oklahomans with private insurance will see their premiums increase as the pool of healthy, insured adults in the private market will decrease. And, as more and more health care providers, especially rural ones, are forced to accept lower government-set reimbursement rates, they will pass along those costs to patients with private insurance. This is what is called the “crowd-out” effect, and it is well known in states which have expanded Medicaid.
Sixth, would Medicaid expansion provide more health care access to children? No. The expansion population will be working age adults-- no additional blind, disabled, elderly, or children will be added. Did you know that 64% of Oklahoma’s kids are already insured via Medicaid? And that nearly 60% of all pregnancies and births are covered by Medicaid?
Seventh, what does Medicaid expansion mean for health outcomes and providing care to our most vulnerable populations? You might assume that expansion will inevitably cost more, but at least it will provide better results. You’d be wrong. A Brookings Institute study released in September found that Medicaid expansion states experienced increased visits to expensive emergency rooms by low-income patients for non-urgent care needs.
Eighth, will Medicaid expansion save rural hospitals, who bear the costs of uncompensated care? No, rural hospitals continue to close in expansion states. Just this past week, a list of two dozen were published.
Ninth, are there alternatives to Medicaid expansion that could make health care and insurance more affordable and accessible without building on Obamacare’s faulty framework? Yes, but you won’t hear about them from the pro-expansion campaign. I have a list of over 20 health care reform initiatives that will cost effectively improve outcomes and healthcare access. But you haven’t heard of them, have you?
Tenth, anything else? Yes. A new federal poverty level is set every year nationally, and that number is the same for the whole country. If you think about Oklahoma, it stands to reason that we will have a larger percentage of people on Medicaid than other states with higher incomes, like New York, or California, or Illinois. And, Oklahoma’s eligible population will increase over and over without our consent. Is that what we want here, more dependency on government programs? How will we ever move “from welfare to work, from dependence to independence, and from poverty to prosperity”? The answer of course, is a growing economy and good paying jobs. And incidentally, that is how we’ll have better health outcomes, too.
Oklahomans asking sharp questions deserve real answers. If we do our homework on the experiences of other states, we won’t follow them on this fool’s errand, and we can focus our attention on better ideas. There are many reasons to defeat SQ802, but costs alone ought to be enough. And maybe education will be spared more budget cuts.
Rep. Mark Lepak, Claremore