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Oklahoma Medicaid Expansion on Hold After Budget Deal

By Marissa Evans, CQ Roll Call

May 31, 2016 -- Oklahoma medical providers are winning a financial reprieve through the state's legislative budget agreement, but Medicaid expansion will have to wait another year.

On May 27, the Oklahoma legislature passed a budget that plugged up a looming $1.3 billion hole but stopped short of expanding the joint federal–state health insurance program for the poor to 175,000 people even after days of national speculation that it could happen.

Oklahoma Gov. Mary Fallin, a Republican, said in a news release that the budget helped prevent the closing of nursing homes and hospitals.

"We worked hard to protect key core services—common education, health and human services, corrections and the Oklahoma Health Care Authority," she said. "My top priorities in my second term are strengthening education and workforce, reducing the state's incarceration rates and improving its health outcomes."

Fallin also noted in her statement that she was disappointed that the legislature did not approve a personal consumption tax for cigarettes which she said "would have been the most important thing we could have done to improve Oklahoma's health ranking." The consumption tax would have also been key to paying for the state's Medicaid expansion plan.

Under the plan proposed by Oklahoma Health Care Authority, or OHCA, the state would have applied for a federal waiver to cover 175,000 uninsured adults and offer them help to pay for a health plan using a subsidy under Oklahoma's Medicaid program. Provisions of the plan also eventually would have folded coverage of more children and pregnant women into Medicaid. Funding for some children and pregnant women is slated to expire under the Children's Health Insurance Program after Sept. 30, 2019.

The plan was also intended to soften a 25 percent provider rate cut in Medicaid reimbursements, a move that could have closed provider doors around the state. Nico Gomez, CEO for OHCA, said in a statement that those cuts are off the table for now as the agency figures out how else to tighten their fiscal belts.

"Against overwhelming circumstances, the governor and the legislature are protecting health care access for thousands of Oklahoma kids, pregnant moms, seniors and individuals with disabilities," Gomez said. "It is now time for the Oklahoma Health Care Authority to deliver on leadership's priority declaration and minimize the impact to the health care professionals we count on to serve our SoonerCare members."

Under the health law, states could expand Medicaid eligibility to individuals with incomes up to 138 percent of the poverty level starting in 2014. The cost of covering the additional beneficiaries is fully covered by the federal government until 2017, when states that expanded will have to start chipping in. By 2020, states will have to cover 10 percent of the cost. So far, 30 states and the District of Columbia have implemented expansion.

Louisiana will be the latest state to go forward with expansion as of June 1, bringing the total to 31 states and the district.

Matt Salo, executive director for the National Association of Medicaid Directors, said in an interview that Oklahoma's Medicaid expansion failure this session did not mean it was the end. He said the presidential election leaves the remaining non-expansion state holdouts in limbo over whether or not to expand soon or wait for a new administration.

"It's predictably difficult to get a lot done in the run up to an election cycle, because maybe things will be different after the election," Salo said. "At the state level once you get through the election and primary season, which is generally more important, that frees up state legislatures to openly and publicly engage on these issues."

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