Medicaid expansion takes effect in deep-red Oklahoma

OKLAHOMA CITY (AP) — A voter-approved expansion of Medicaid took effect Thursday in Oklahoma after a decade of Republican resistance in a state that has become emblematic of the political struggle to extend the federal health insurance program in conservative strongholds.

Oklahoma moved ahead with its expansion at a time when Democrats in Washington and across the states are pressing to complete the work of the Obama-era Affordable Care Act, recently upheld by the Supreme Court for the third time in a decade. So far, 38 states and Washington, D.C., have expanded Medicaid, and expansion in a dozen mostly Southern states may be the biggest piece of unfinished business.

“Anyone banking on the idea that Obamacare was just going to be struck down — the Supreme Court has moved past that,” said Cindy Mann, who served as federal Medicaid chief during the Barack Obama administration.

“All of the states that are still debating the issue are constantly looking at other states’ experience to get a sense of what they can expect,” added Mann, now with the Manatt Health consultancy. “Having Oklahoma — a very red state — moving forward judiciously and with very strong enrollment is showing that this is a sensible path to go.”

More than 123,000 low-income people already have been approved for Medicaid coverage in Oklahoma, a state where nearly 15% of the population has been uninsured — the highest rate in the nation behind Texas, according to the non-profit Kaiser Family Foundation. State Medicaid officials say they expect that number to increase to more than 200,000 as more people get approved.

Danielle Gaddis of Oklahoma City is 26 and preparing to begin medical school. She has been without private health insurance since her mother, whose health plan she was on, retired two years ago.

When Gaddis began running a fever over the winter, she couldn’t afford to see a doctor and instead spent two weeks trying to recover on her own. That will change since she's been approved for Medicaid thanks to the expansion.

“Just the financial worry is gone," Gaddis said. “It's nice to know that's something I don't have to worry about."

Oklahoma voters narrowly approved a constitutional amendment last year to expand eligibility for benefits. Now, an individual who earns up to $17,796 annually, or $36,588 for a family of four, qualifies for Medicaid health care coverage. By contrast, the median income limit for parents in states that didn't expand their program is about $8,905 for a family of three, according to the Kaiser Family Foundation.

“I want to congratulate Oklahoma on joining the ranks of states that are bringing quality health coverage to our neighbors and families," said U.S. Department of Health and Human Services Secretary Xavier Becerra, who visited Oklahoma Thursday to discuss the significance of Medicaid expansion.

Medicaid started out in the 1960s as a federal-state health insurance program for severely disabled people and low-income families on welfare, but it now covers nearly 74 million people, or more than one in five Americans. The program expansion under Obama brought in some 12 million low-income people, mostly low-wage workers.

The states most closely watching Oklahoma are Missouri – where voters approved an expansion but GOP legislators balked at funding it – as well as Kansas, where Medicaid expansion has been actively debated. In Missouri, a judge recently ruled that the ballot question there was unconstitutional.

In South Dakota, several major health care systems last month announced plans to begin gathering signatures for a ballot measure to expand Medicaid there.

Opponents of expansion argue that the costs to the states are excessive. Missouri Gov. Mike Parson has described the expansion as “a massive tax increase that Missourians cannot afford.” Oklahoma helped offset the costs by increasing a fee that hospitals must pay.

President Joe Biden’s coronavirus relief law dangles a significant financial bonus in front of states that expand their programs now. Oklahoma is the first to qualify.

Under the Biden legislation, states newly expanding will receive a two-year, 5-percentage-point bump up in federal matching funds for their regular Medicaid programs. That’s on top of a 90% federal match for the costs of covering the newly insured through the expansion. Manatt estimates the bonus alone would work out to $786 million for Oklahoma, but bigger states like Texas and Florida would reap much more.

More than 2 million low-income uninsured people remain in a coverage gap as long as Medicaid expansion is unfinished. They make too much to qualify for Medicaid under their individual state’s rules, but not enough to qualify for “Obamacare’s” subsidized private insurance.

“Right now, millions of Americans do not have health care coverage through no fault of their own because their states haven’t expanded their Medicaid programs,” said Rep. Frank Pallone, D-N.J., chair of the U.S. House committee that oversees Medicaid.

In Washington, there’s a growing demand among Democrats for the federal government to step in and take direct action if states continue to hold out. It’s seen as a health equity issue, since many of the uninsured people in the coverage gap are racial and ethnic minorities.

“Having Oklahoma and Missouri going in two different directions really illustrates the need for the federal government to do something,” said Jesse Cross-Call, a health policy expert with the Center on Budget and Policy Priorities in Washington, which advocates for low-income people. “There continue to be states that are going to throw up roadblocks and resist this no matter what you put in front of them.”

James Capretta, a health policy expert with the business-oriented American Enterprise Institute in Washington, said there’s also been a reluctance among Democrats to compromise, since they reject ideas that would alter the basic terms of the Obama health law.

Nonetheless, “there ought to be a bipartisan consensus here, since there really is no alternative to Medicaid as the safety net health insurance program,” Capretta added. “We already have a program. And there is still a gap population. The logical thing to do is find some way to make sure these people are at least being helped.”