Medicaid, America’s largest entitlement program based on enrollment, continues to squeeze state budgets and crowd out other state priorities.

According to the National Association of State Budget Officers (NASBO), Medicaid now consumes a larger portion of state budgets than common education, higher education, or corrections. Surveying all 50 states, NASBO found Medicaid was responsible on average for nearly 30 percent of state expenditures in fiscal year 2018. In contrast, common education, higher education, and corrections consumed 20, 10, and 3 percent of state spending, respectively.

This is a significant increase over the last 20 years. In 1998, Medicaid was responsible for 20 percent of state spending on average.

In Oklahoma, Medicaid’s share of total state spending has grown faster than any other category of state spending since 1998. According to NASBO, Oklahoma's Medicaid program was responsible for more than 24 percent of Oklahoma's state expenditures in FY 2018.

Source: National Association of State Budget Officers State Expenditure Report, 1998 and 2018

Source: National Association of State Budget Officers State Expenditure Report, 1998 and 2018

Oklahoma state lawmakers and Governor Kevin Stitt have taken action to control the rising costs of the state’s Medicaid program by strengthening enrollment audits. This is important because the majority of improper payments are made on behalf of ineligible enrollees—not financial errors by providers, according to federal audits by the U.S. Department of Health and Human Services.

In 2018, the Legislature passed the HOPE Act (HB 1270), which directed the Oklahoma Health Care Authority (OHCA) to increase the frequency of enrollment audits and bring in an outside contractor to help verify eligibility. According to correspondence from OHCA representatives, OHCA is still in the process of securing an outside contractor; they project they will finalize the contracting process by the end of this year.

Other states have seen measured success by bringing in outside vendors to help review state Medicaid rolls.

As part of its bipartisan initiative to stop Medicaid fraud and waste, in 2012 Illinois brought in an outside vendor to strengthen its enrollment eligibility process. In the first two years of its initiative, Illinois removed nearly 700,000 ineligible individuals from the program, resulting in a hefty savings for Illinois taxpayers. According to a 2015 report from the Illinois Policy Institute, “State officials initially projected that the enhanced program-integrity initiative would save taxpayers $350 million per year. Based on the results of the second year, taxpayers can now expect to save between $390 million and $430 million per year, with greater savings accumulating over time.”

Earlier this year, Governor Stitt requested a separate audit of Oklahoma’s Medicaid rolls, which is projected to be completed early next year according to OHCA. “It is important that we ensure our resources are supporting those in our state that need it the most,” Gov. Stitt said. “States across the nation have already completed Medicaid audits and found significant savings because of it. I believe this audit will allow us to continue to be transparent and efficient with taxpayer dollars while also ensuring we are providing a safety net for the most vulnerable in Oklahoma.”

As Medicaid programs continue to expand in size and cost, more vigorous audits are necessary to ensure taxpayer dollars are being spent only on those who are eligible for Medicaid.