Budget crisis creates health care funding woes

May 3--The coronavirus has cast doubt about the fruition of many state initiatives, including the expansion of Medicaid for Oklahomans.

Gov. Kevin Stitt set June 30 as the date for Okies to vote on State Question 802, which would change the state constitution to expand Medicaid. Meanwhile, Stitt has proposed an alternative to SQ 802 that lawmakers say will add more flexibility to the program, but has critics claiming it will decrease the number of those covered. The Health Care Authority submitted an application for President Donald Trump's Healthy Adult Opportunity waiver that would allow for work requirements and charge premiums for newly eligible Medicaid recipients.

The cost of the expanding Medicaid, which previously was estimated to be around $150 million, is now expected to be closer to $250 million. Before the outbreak of COVID-19, the state had money banked that would have likely made paying for the cost more feasible. But with a downturn in the economy and oil prices hitting rock-bottom numbers, the state is facing a budget shortfall of $1.4 billion next year.

State Sen. Dewayne Pemberton, R-Muskogee, said one of the tasks for the Legislature next week will be to figure out how to fill the budget shortfall, as well as cover Medicaid. If SQ 802 passes on June 30, lawmakers will have no choice but to find the funding, even if it means cutting state agencies' budgets.

"That's the downside to it," said Pemberton. "It may cause additional cuts, depending on the way we do it. We want to try to minimize those as much as possible, but $1.4 billion is a lot of money to be short in the 2021 budget year. So, cuts are coming. It's just how deep are the cuts going to be?"

The state question would allow for what legislators are calling a "traditional" expansion of Medicaid. It would expand coverage to adults under 65 who make up to 138 percent of the federal poverty level, or up to an annual salary of $17,236 for an individual or $35,534 for a family of four. Stiitt's SoonerCare 2.0 plan also proposes expanding coverage to adults earning up to 138 percent of the poverty level, but the governor has requested a waiver for people in the newly covered group to be charged premiums, and to require new enrollees to meet work requirements.

Democrats have been adamant that it is time to expand Medicaid so more state residents can become insured. And while many Republicans are hesitant about expansion, it appears they prefer Stitt's plan over the "traditional" route. However, Pemberton said it might be "a little bit late for the governor's plan now."

"I think it's going to be up to the people now on the ballot," he said. "Personally, I would rather see the expansion, if we're going to do it, in statutes, as opposed to constitutionally. That's the difference in the two plans. The governor's plan would basically put it in statutes to where it could be modified as time goes on, and the state ballot initiative puts it in the state constitution, so it can't be changed except by a vote of the people."

While the state would have more flexibility to adjust Medicaid under Stitt's plan, proponents of SQ 802 claim the work requirements and cost-sharing provisions would mean fewer people receive coverage, compared to the number of new enrollees if the ballot measure passes.

"I hope to see SQ 802 passed by the voters in June," said Dell Barnes, Cherokee County Democrats vice chair. "As far as the budget shortfall, the savings to the people of the state far exceed the required contribution and increased health care dollars will help Oklahoma's economy to get back on track."

Stitt has indicated he would pay for the state's portion of the cost -- 10 percent -- with an increase in the Supplemental Hospital Offset Payment Program, which is essentially a fee on providers that currently sits at 2.3 percent. However, Republicans have admitted the increase in fee will not likely cover the full cost.

Cherokee County Young Republicans Chair Justin Kennedy would prefer seeing Stitt's plan in place, but he would also like to see the Legislature deal with the budget crisis before making a move on expansion.

"I know a lot of people don't agree with that and want to cut agencies. I would hate to see a plan put forth that's going to add charges to folks that are already depending on SoonerCare, so I don't think that's the answer, either," he said. "And I don't think you're going to fund the system by minimal charges anyway. What I would say is wait until oil and gas comes back up, address the issues at the state level and find a fix for the budget so we're not just completely dependent on oil and gas."

Voters have until June 30 to decide whether they think SQ 802 should take a front seat to Stitt's SoonerCare 2.0.

State Rep. Matt Meredith, D-Tahlequah, and Cherokee County Libertarian Party Chair Shannon Grimes could not be reached by press time.

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