Health Care

Billions spent, few results: Medicaid expansion falls short of promises to rural Oklahoma

October 15, 2025

Ray Carter

When Oklahoma voters were asked in 2020 to expand Medicaid to provide taxpayer-funded coverage to able-bodied adults, proponents repeatedly claimed expansion would save rural hospitals and put them on a secure financial footing.

But a legislative study conducted by members of the Oklahoma House Appropriations and Budget Health Subcommittee this week showed, tacitly, that five years later, Medicaid expansion has still done little or nothing to improve the overall financial standing of rural hospitals.

Notably, those presenting the negative data included one group—the Oklahoma Hospital Association—that actively advocated for Medicaid expansion, which has increased government spending on the program by billions of dollars yet done little to improve either health outcomes in Oklahoma or the stability of rural hospitals.

Maggie Martin, chief legal officer for the Oklahoma Hospital Association, told lawmakers that profit margins at Oklahoma’s rural hospitals are weak, ranking 35th out of the 50 states.

“They have lower total margins and lower operating margins than the majority of hospitals in the country,” Martin said. “So, their financial performance was poorer than other states around the country.”

She noted that rural hospitals in Texas “fared a lot better.”

Rural hospitals in Texas ranked 11th-best nationally in total margin, and the total margin for urban hospitals in Texas ranked in the top five states. Notably, Texas has not expanded its Medicaid program to include able-bodied adults.

Martin said 53 percent of rural Oklahoma hospitals were at medium-to-high risk of closure in 2023, the most recent data available.

A smaller share of rural hospitals in Texas were at risk of closure that same year. An Oklahoma Hospital Association slide presentation declared that hospitals in Texas demonstrate “the strongest financial positioning among peers.”

State Rep. Danny Williams, R-Seminole, noted that nearly two dozen Oklahoma hospitals appear to be on their last legs.

“Right now, today, I think 23 hospitals are on the verge of collapse,” Williams said. “Stilwell, up in Adair County, closed not too long ago. There’s others right on that verge.”

Promises Made, Promises Unkept

The data presented to lawmakers during this week’s study counters claims made by proponents of Medicaid expansion, including officials with the Oklahoma Hospital Association.

The website for the “Yes on 802” campaign, which resulted in narrow voter approval of Medicaid expansion in 2020, declared that Medicaid expansion would “keep our rural hospitals open.” A campaign ad  for “Yes on 802” similarly claimed Medicaid expansion would “keep rural hospitals open.”

In May 2020, the Oklahoma Hospital Association released a study claiming that rural communities would benefit from Medicaid expansion because it would bolster “vulnerable rural hospitals that have been on the verge of closure for years.”

Multiple reports have since shown those claims were false.

Medicaid spending in Oklahoma increased by 81 percent from $5.7 billion in the pre-expansion 2019 state budget year to $10.5 billion in the 2024 budget year.

Yet several reports have found that hospitals in Oklahoma are on less secure financial footing today than they were before Medicaid expansion.

That’s not surprising since even hospital executives who endorsed Medicaid expansion acknowledged that they lose money treating Medicaid patients because the payment received is often less than the cost of service.

A 2024 study from the Foundation for Government Accountability (FGA) noted that increasing the number of patients on Medicaid simply translates into losses for many health-care providers.

“The more people that are shifted from private insurance to Medicaid, the higher the Medicaid shortfalls, and the lower hospital profits,” wrote Michael Greibrok and Hayden Dublois. “Hospitals are learning that you cannot become solvent by providing more and more services below cost. This is a surefire way to bankruptcy, not solvency.”

Greibrok, senior research fellow at FGA, and Dublois, data and analytics director for FGA, reviewed the federal filings of more than 4,000 hospitals nationwide. In 2013, the final year before Medicaid expansion was implemented under the federal Affordable Care Act (“Obamacare”), the FGA report showed that hospitals in states that embraced expansion reported just over $10 billion in losses due to Medicaid.

But, by 2021, those Medicaid losses had ballooned to $22.3 billion at those states’ hospitals, an increase of 115 percent.

In contrast, hospitals in non-expansion states saw their Medicaid shortfalls increase by only 6 percent.

The report found that hospital profits in non-expansion states are now higher than profits in states that expanded Medicaid to include able-bodied adults, a finding that corresponds with the Oklahoma Hospital Association’s data showing Texas rural hospitals are in better shape today than Oklahoma rural hospitals.

The FGA report found that hospital profits in states that did not expand Medicaid were “five times that of hospitals in expansion states” on average.

Medicaid expansion has not created better health outcomes in Oklahoma, either.

The Commonwealth Fund’s “2025 Scorecard on State Health System Performance” report showed that in Oklahoma in 2018-2019, before Medicaid expansion, there were 117.7 deaths per 100,000 population before the age of 75 from health-care-treatable causes. By the 2022-2023 period, the most recent for which the report had data, that figure had increased to 124.6, despite Medicaid expansion.

The death rate in Oklahoma was far higher than the rates in nearly all states that have not expanded Medicaid.

Oklahoma ranked 48th on health outcomes and healthy behaviors, according to the Commonwealth Fund, which was worse than the outcomes in nearly all states that have not expanded Medicaid.

In some cases, non-expansion states ranked significantly higher than Oklahoma. Florida ranked 20th in health outcomes, while Texas ranked 27th.

Oklahoma also ranked 48th on health care access and affordability. Once again, most states that have not expanded Medicaid fared better.

Yet health-care officials did not openly acknowledge that Medicaid expansion has not lived up to the promises made by advocates. Instead, they spent much of this week’s legislative study decrying federal deficit-reduction measures, including the imposition of a work requirement on able-bodied adults currently on Medicaid.

Under the federal “One Big Beautiful Bill Act” signed into law this summer by President Donald Trump, able-bodied adults who have no children and are between the ages of 19 and 64 are required to complete at least 80 hours per month of work, volunteering, education, or job training to maintain Medicaid eligibility.

Officials with the Oklahoma Health Care Authority estimate that roughly 126,000 adults currently granted taxpayer-funded health coverage through Medicaid will be subject to the work requirements.

Hospital officials suggested they expect most of those individuals to be kicked off Medicaid either because they fail to comply with the work requirements or because work will cause their incomes to increase beyond the point at which they are eligible for Medicaid.

But one state lawmaker noted that trend should indirectly benefit Oklahoma hospitals’ bottom line.

State Rep. Mark Tedford, R-Tulsa, noted that work requirements are likely to result in more people gaining private insurance either through employment or because they will soon earn enough money to buy coverage on the individual market. Because private insurance pays health-care providers more than Medicaid, that will ultimately improve state hospitals’ financial stability.

“It seems to me that, as we go into the future, that providers would do increasingly better if we have a higher percentage of our state population in the private market rather than Medicaid,” Tedford said.

A Sept. 3 report from the Foundation for Government Accountability agrees with Tedford’s assessment, writing that the reforms included in the “One Big Beautiful Bill” (OBBB) curb “some of the worst enrollment-maximizing traits of Medicaid expansion by implementing work requirements” and by tackling “waste, fraud, and abuse in Medicaid, freeing up resources for rural health care investment.”

The study notes the new federal law, in addition to implementing work requirements for able-bodied adults on Medicaid and limiting various state schemes that offload increased costs onto the federal government, also provides a $50 billion Rural Health Transformation Program that states will use to address rural health care challenges.

The report notes that Medicaid expansion is “shuttering hospitals” with 74 hospitals having closed in states after they expanded Medicaid. Rather than continue down that path, officials with the Foundation for Government Accountability say state officials should embrace the opportunity the “One Big Beautiful Bill” law provides to course correct and truly improve rural health care.

“If rural hospitals are struggling, an overreliance on Medicaid is in large part to blame,” the Foundation for Government Accountability report states. “The new law delivers reforms that restore program integrity to Medicaid, aiding providers and ultimately, the truly needy.”