Changing the face of Medicaid

Feb. 23--For every dollar the state pays into Medicaid, the federal government will put in $1.69. That means for every dollar the state does not pay, Oklahoma health service providers lose access to $2.69. Children are the biggest losers, as more than 100,000 Oklahomans remain uninsured.

"One of every three people in Oklahoma is either on Medicaid or uninsured," Oklahoma Hospital Association President Craig Jones said. "Putting a face on Medicaid is terribly important. Most people don't realize that over half the recipients are children."

Seven percent are adults over age 65. A large percentage of the adults served are blind or disabled.

Jones reported on current developments with Oklahoma Medicaid and the future of Oklahoma hospitals at Monday's Norman Regional Hospital Authority Board meeting.

The federal government requires a minimum level of benefitsfor Medicaid enrollees, but states can provide more. Oklahoma is now down to the minimum, Jones said.

"It's not good to say, 'We're not going to cover as many people,'" he said. "The only way the state now has to save money is to pay the providers less, which is, of course, what we've experienced."

Jones said Oklahoma hospitals are slated to lose $4 billion over the next eight years due to current cuts in Medicare and Medicaid. These cuts could be partially offset if the state supported a plan by OHA to use $8.6 billion in available new federal money, not to expand Medicaid, but to broaden coverage for the uninsured under the state's Insure Oklahoma model.

Oklahoma State University did an IMPLAN Study and found the net economic impact to the state for taking the additional federal dollars is $18 billion, in part due to the ripple effect through the economy and because that money would generate 24,000 jobs.

Not all health care providers are hospitals, but hospitals can't turn away certain patients and many are suffering financially. Hospitals in rural communities are closing. Fifteen rural hospitals in Oklahoma were at risk in 2015. This year, there are 42, second only to Texas (with 75), according to a national study by IVantage Analytics.

"There are some hospitals out across rural Oklahoma that will not survive," Jones said. "Some of those should not survive as they are currently structured today, but that doesn't mean the community doesn't need health care."

While Jones admits the health care model has to change, Oklahoma hospitals need additional federal funding to help them make the transition to a more efficient model.

Hospitals' failures have ripple effects on communities that extend beyond available health services.

"It's typically the second largest employer in town," Jones said.

Meanwhile, current Medicare and Medicaid cuts will impact Norman Regional by $132 million in the next eight years. The Oklahoma City region will experience a loss of $1.7 billion.

Oklahoma has chosen not to expand Medicaid primarily for philosophical reasons.

"We don't seem to have any problem with federal dollars going into education or federal dollars going into roads," Jones said. "It's because this is linked to Obamacare and everyone in the state wants to repeal that."

The Oklahoma Hospital Association has looked for a way to get around that, but the plan will need some bold legislators who will give the governor the support she needs to move forward with a new plan, Jones said.

Insure Oklahoma is a popular program enacted eight years ago in a bipartisan effort that allows the state to partner with small businesses and their employees to provide affordable insurance.

"It's a premium assistance program for small employers," Jones said. "It's wildly successful."

The money comes from the state's tobacco tax, but only 17,000 are enrolled now because the program is extended on an annual basis and small employers are reluctant to add a benefit when they don't know if it's going to be there long term.

"There hasn't been any sustainability to it," Jones said. "It's politically popular. It's got widespread support. Let's use that as a base."

Rather than expanding Medicaid, the state can use those same federal dollars for Insure Oklahoma.

"In Arkansas, they're not using Medicaid, they're using those federal dollars to buy private insurance, which is what Insure Oklahoma does," Jones said.

The OHA's proposed plan is to improve quality and contain costs by moving from volume-based to value-based purchasing, an action Norman Regional Health System has taken through partnering for group purchasing power.

The plan also would help reduce unnecessary use such as emergency room visits and hospitalizations through "enhanced care coordination and access to primary care," Jones said.

People who can't afford basic health care tend to wait until there's an emergency to seek help, in part because hospitals can't turn them away for not having insurance.

The plan also would "integrate services for high-cost, high-need beneficiaries with physical and behavioral health 'comorbidities,'" Jones said.

This coverage reform would build on Insure Oklahoma through involving the private sector and requiring personal responsibility. Work and education would be incentivized and the plan would provide the sustainability needed to gain participants, Jones said.

An added benefit would be predictability for state budgeting.

The net gain to the state of infusing these new dollars into the economy through OHA's proposal using Insure Oklahoma would be more than $600 million over eight years.

"It pays for itself," Jones said.

The OHA currently estimates Norman Regional could offset its loss about $92 million if the state accepted the newly available federal funds for Insure Oklahoma.

Jones said agencies like the Department of Mental Health and Substance Abuse Services and the Department of Corrections whose budgets are 100 percent state funded would benefit from Oklahoma accepting these federal funds, with MHSAS gaining as much as $34 million and Corrections receiving $11 million. The Department of Health would benefit to the tune of about $2.4 million, a savings of $48.2 million annually to the state, Jones said.

Surveys indicate voters of both parties want the state to act. Fourteen percent of Republicans say to expand Medicaid, 27 percent of all Oklahomans say to expand and 46 percent of those polled support putting federal dollars into Insure Oklahoma.

"We think that provides some very interesting political coverage," Jones said.

He said we need to call on legislators to take action.

"It's providing a hand up to people, not a handout," Jones said. "We have to give the legislators a reason to vote for this and that comes from more of a groundswell."

Joy Hampton

366-3544

[email protected]

Follow me @joyinvestigates

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