Coronavirus pandemic complicates Medicaid expansion efforts in Oklahoma
Published: Mon, April 27, 2020 5:00 AM
When Oklahoma expands Medicaid on July 1, legislators still haven't decided how to pay for the state’s share of the expansion. [Bryan Terry, The Oklahoman]
Oklahoma is on track to expand Medicaid on July 1, but legislators still don’t know how to pay for the state’s share of the expansion.
And the COVID-19 pandemic has complicated the situation.
Skyrocketing unemployment claims mean the expansion, and costs for the state’s current Medicaid program, could be about $100 million more than previously anticipated.
Altogether, the $250 million would amount to about 3% of the current state budget, but the state is projected to have a $1.3 billion revenue shortfall in the budget year that begins July 1.
In other words, extra cash will be hard to find next year.
Gov. Kevin Stitt said he’s still aiming to pay for the state’s 10% share of Medicaid expansion by increasing a hospital fee. The federal government will cover 90% of expansion costs.
“I maintain I will not raise taxes on Oklahomans,” Stitt said. “This is going to have to be a provider tax, and the Legislature’s still kicking around how to fund that.”
The provider fee is the Supplemental Hospital Offset Payment Program, enacted in 2011. So-called SHOPP assesses a fee of up to 4% of annual net patient revenue at 65 Oklahoma hospitals. The fee, which is adjusted annually, currently sits at 2.3%.
The fee was never intended to fully cover the cost of expansion, so the state will have to find more money from somewhere to cover the rest, said Sen. Greg McCortney, R-Ada.
Already a hard sell to a Republican-controlled Legislature, the state’s financial outlook has some lawmakers questioning the timing of the expansion. Stitt wants to expand Medicaid on July 1 as part of his SoonerCare 2.0 plan, which he devised as an alternative to State Question 802.
SQ 802 asks voters to enshrine Medicaid expansion in the state’s constitution, and it would have to take effect by July 1, 2021.
“Between not knowing how much (Medicaid expansion) costs now and not really having an opportunity to thoroughly vet exactly what the long term plan is, I’m personally in favoring of slowing down and kind of putting the brakes on it right now,” McCortney said.
But in the months since negotiations started, the COVID-19 crisis has dramatically changed the financial picture for Oklahoma hospitals.
Following an executive order from Stitt, hospitals had to put elective surgeries and minor medical procedures on hold for about a month to be able to free up hospital beds for an anticipated flood of coronavirus patients.
“The budget downturn related to the COVID-19 virus certainly puts financial strains not only on the state but also our hospital members,” Oklahoma Hospital Association President Patti Davis said in a statement. “As hospitals have scaled back elective surgeries and procedures in preparation for a surge of COVID-19 patients, the financial situation for most hospitals has changed significantly over the past month.
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“At the same time, expanding Medicaid would bring back $9 into the Oklahoma economy for every $1 investment by Oklahoma. This infusion of federal funds into Oklahoma in this downturn is something that must be considered seriously.”
Stitt allowed some elective surgeries to resume last week, and all will be able to resume Friday.
But the hospital association has warned patients there could still be delays with some elective surgeries and minor medical procedures as hospitals seek additional personal protective equipment for health care workers.
“The hospitals, they definitely want it,” said Rep. Marcus McEntire, R-Duncan. “That hasn’t changed, and with this pandemic, it may have accelerated their desire to get it going because expansion could really help them with their cash flow.”
“Our job at the Health Care Authority, at this time, is to make sure we’re ready operationally and ready to serve,” he said.
Corbett appeared before the Senate Health and Human Services Committee, chaired by McCortney, as the Senate vets his appointment to the Health Care Authority.
There’s still not an agreement on SoonerCare 2.0 or funding for the plan, Senate Pro Tem Greg Treat, R-Oklahoma City, told reporters Thursday.
“There’s no agreement to that end yet,” he said. ”I know the governor is still pursuing the state plan amendment with the federal administration, but we have not committed to getting the money there yet.”
In early March, the Health Care Authority submitted to the Centers for Medicare and Medicaid Services a state plan amendment seeking to expand Medicaid.
The agency recently submitted an application for a Healthy Adult Opportunity waiver that would allow the state to impose work requirements and charge premiums for newly eligible Medicaid recipients.
With the vote on SQ 802 set for June 30, it’s unclear if Stitt might be willing to delay implementation of his expansion plan.
“It seems this governor gets laser-focused on something and he wants to see it through to the end, and he may be that on this issue,” McEntire said.
Carmen Forman covers the state Capitol and governor's office for The Oklahoman. A Norman native and graduate of the University of Oklahoma, she previously covered state politics in Virginia and Arizona before returning to Oklahoma. Read more ›