Many Oklahomans likely to lose medical insurance coverage, lawmakers told

Working class Oklahomans are likely to lose health care coverage in the coming years, and not just because of the One Big Beautiful Bill's Medicaid component, lawmakers were told Tuesday.

There were dissenters. Among them, Rep. Mark Tedford, R-Tulsa, and an insurance professional, who said private insurers will take up the slack.

But that was not the message that emerged in a Tuesday House interim study intended to clarify the health care implications of the landmark OBBB, but overflowed its banks to include the state's managed Medicaid system and the expiry of Affordable Care Act insurance premium subsidies.

"Lot of information there," said Rep. Mark Chapman, R-Broken Arrow — and that was just in the first half-hour.

Chapman said he asked for the interim study to better understand changes to Medicaid because of the OBBB's reforms.

The changes are coming as the state's Medicaid agency, the Oklahoma Health Care Authority, goes through a second leadership change in three years and is still working out kinks in its privatized managed care system.

Former Chief Executive Officer Ellen Buettner recently left after two years on the job to run the Regional University System of Oklahoma, and state Medicaid Director Christina Foss is on her way out after only a few months in the position, Oklahoma City television station KFOR recently reported.

New OHCA director Clay Bullard started work Monday. A long-time health care consultant, Bullard is probably best known to the public for acquiring $2.6 million worth of the drug hydroxychloroquine for the state during the COVID-19 pandemic.

The drug was never used and ultimately returned to it's California supplier for a refund.

In any event, Foss represented the OHCA at Tuesday's hearing, where she testified along with Muskogee physician Tracy Hoos and representatives from the Oklahoma Hospital Association and the Oklahoma Association of Health Plans.

Foss said the OBBB's biggest effect on Oklahoma is likely to be in reduced directed payments to hospitals and providers and more rigid eligibility and reporting requirements for the 126,000 Oklahomans covered by expanded Medicaid.

Another important component of the Medicaid reforms is a five-year, $50 billion rural healthcare innovation grant program. Foss said Oklahoma has been told to expect at least $200 million a year.

The money cannot be used for operations, though, which the two representatives of the Oklahoma Hospitals Association said could be a problem for rural providers.

The association predicts all state hospitals will lose $6.8 billion over the next 10 years from the Medicaid changes, and physicians will lose $130 million.

Chief Legal Officer Maggie Martin said that does not include likely increases in uncompensated care.

Hayley Faulkenberry, executive director of the Oklahoma Association of Health Plans, said the effect will be intensified if the ACA premium tax credits are allowed to expire at the end of the year.

Already, she said, premiums on the exchange and elsewhere are expected to rise sharply, in part because of uncertainty about the credits.

Healthier individuals will be more likely to drop health insurance, Faulkenberry said, which will then cascade into more cost sharing and higher expenses for everyone.

Exchange premiums will be published on Friday.

Some of the most compelling testimony came from Hoos.

"This is not going to be a gripe session or anything like that," Hoos said, before proceeding to a list of provider complaints against Medicaid and private insurers alike.

"Whenever my peers learned I had this opportunity, I got a lot of phone calls," Hoos said.

Among his patients, Hoos said, expanded Medicaid is helping the working poor, self-employed people and young people "just starting out."

He cited the case of a 19-year-old college student hospitalized for a week with a ruptured appendix that required two surgeries.

The expanded Medicaid, Hoos said, saved the patient from "becoming medically bankrupt."

Another example was a patient who couldn't work for awhile because of cancer but was covered by expanded Medicaid and has since returned to a job.

But, Hoos said, the state's managed care system requires providers to deal with three different insurers plus the Health Care Authority, which has required him to hire an additional staff member.

He said payments have slowed under the managed care system, which is another problem.

Private insurers, meanwhile, have raised deductibles and other out-of-pocket expenses to the point that health care providers have become de facto debt collectors — unless patients also have Medicaid coverage to pick up some of the deductibles.

Asked by Chapman for his top priorities, Hoos replied, "No. 1 is to streamline the managed care organization. … Dealing with one is hard enough, but dealing with three can be next to impossible for a practice my size. And practices my size are the ones a lot of communities like mine thrive on.

"The other thing is we have to address the commercial payers," he said. "More and more high deductible plans are comi ng through. … The more of these high deductible plans that are coming through, if the (patient) is dual covered with Medicaid, the more money the state is putting in. A lot more money."

Rep. Mark Tedford, R-Jenks, was among those suggesting the concerns raised Tuesday are misplaced or overstated.

"Again, 126,000 people may be affected by the work requirement in Medicaid. I don't think we should assume all 126,000 people will not have coverage in the future. It could be that they would get into the workforce and get coverage through their employer," said Tedford, who is involved in the insurance industry. "I would hope that does happen."

His point, Tedford said, is that private insurers tend to reimburse at higher rates, which means more revenue for providers if people are moved from Medicaid to private insurance.

Martin replied that many employers don't offer insurance, or if they do it is too expensive for the employees.

In any event, many of those on expanded Medicaid are already working, but at low wage jobs.

"Whether it's the expansion of Medicaid or the ACA extended subsidies, these have not been around a long time," Tedford said later. "It's not like these are long entrenched programs that are being unzipped by the federal government.

"As a state, we're going to have to stare down the reality of having a lot less federal money available to subsidize healthcare," he continued. "My opinion is that (those losing Medicaid or ACA coverage) will seek employer-sponsored plans."

Because of that, Tedford said, policymakers should be "making sure the employer-sponsored marketplace, and particularly the small business marketplace, is healthy, robust and has affordable costs."