Supporters of the Obamacare Medicaid expansion under State Question 802 pitched it as a windfall of “free” federal dollars. But there is no magic pool of federal cash. There are just open-ended federal commitments that require Oklahoma to cover its share year after year. 

Granted, the temporary surge of federal COVID-era funding masked the true cost of expansion for a few years, but those dollars are now fading out. Oklahoma is on the hook for sharply higher obligations tied to the Medicaid expansion population.

Spending at the Oklahoma Health Care Authority (OHCA) has ballooned since the Medicaid expansion passed, rising by nearly $3.5 billion since 2020. Across all OHCA programs, enrollment has grown by 520,084 people—a stark reversal from the years 2015 through 2019, when enrollment actually declined. The expansion population alone now stands at 428,573 enrollees.

One of the primary mechanisms sold as a way to help fund expansion was the Supplemental Hospital Offset Payment Program (SHOPP). SHOPP is effectively a provider tax: hospitals pay fees, the state uses those fees to draw down federal matching funds, and the money is then redistributed to hospitals as supplemental Medicaid payments. In reality, it functions more like an accounting scheme that inflates health-care costs and deepens the national debt rather than sustainably funding the program.

A recent report from the Legislative Office of Fiscal Transparency (LOFT) shows Oklahoma’s share of Medicaid expansion costs is growing much faster than SHOPP collections. LOFT found that in 2025, the cost of expansion exceeded SHOPP revenue by $45 million, leaving the state responsible for covering the gap. And that shortfall emerged even after lawmakers hiked the SHOPP fee from 2.5% to 4% in 2021. Since that increase, SHOPP revenue has grown by $152 million—but total state spending at OHCA has grown by $994 million.

In short, Medicaid expansion is not paying for itself, and the fiscal gap is widening—just as OCPA warned would happen.