Health Care

Ray Carter | February 1, 2021

Democrats criticize effort to control growing Medicaid cost

Ray Carter

Although the passage of a ballot measure mandating expansion of Oklahoma’s Medicaid program means state taxpayers will face increased costs, Gov. Kevin Stitt argues policymakers should work hard to slow that growth.

To that end, Stitt told lawmakers that Oklahoma must join the 40 states that use managed care as part of their Medicaid system.

“With Medicaid expansion now in our Constitution, this is the perfect opportunity to reimagine health care delivery in Oklahoma. It’s time to focus on outcomes and not just paying invoices,” Stitt said in his State of the State speech. “Forty states have found managed care is the best way forward: Texas, Kansas, Iowa, Tennessee, Florida, even California and Illinois. It’s not a red-state thing or blue-state thing. It’s the smart thing to do.”

He noted that every state that has expanded its Medicaid program also uses managed-care oversight to keep cost increases in check. By using managed-care providers in Medicaid, officials hope to direct Medicaid patients to early, and less-costly, forms of preventative treatment, rather than paying for expensive late-term care. For example, officials at the Oklahoma Health Care Authority hope to reduce hospitalization among Medicaid patients by 40 percent through increased use of routine and preventative care earlier in the process.

Other states have generated significant savings through managed care in state Medicaid systems. In 2016 and 2017 Ohio saved between $3.5 and $4.4 billion through its Medicaid managed care program compared to what it would have paid through a fee-for-service system, according to the Wakely Actuarial Consulting Group.

Democrats quickly voiced opposition to Medicaid managed care following Stitt’s address.

Senate Democratic Leader Kay Floyd, in a statement issued on behalf of the Senate Democratic caucus, said managed-care reform is being “rushed.”

“We continue to be concerned with the process through which the governor is implementing a managed care system for the state’s Medicaid program,” said Floyd, D-Oklahoma City. “Converting Medicaid delivery to managed care is a $2.2 billion endeavor, yet there has been very little input from the Legislature and from the medical community. It is especially troubling this process, which is a major change to our state’s health care system, is being rushed through as our state’s hospitals and medical providers are on the front lines treating Oklahomans with COVID-19.”

In June, Oklahoma voters narrowly approved an initiative that allows certain able-bodied adults to enroll in Medicaid. Officials with the Oklahoma Health Care Authority predict Medicaid expansion will add $164 million in annual state expenses for the program. However, that estimate assumes the program’s enrollment will increase by just 200,000 individuals because of expansion, even though that represents just 32 percent of the 628,000 additional Oklahomans now eligible for Medicaid coverage, according to a prior study commissioned by the Oklahoma Health Care Authority.

Senate Appropriations Committee Chairman Roger Thompson, R-Okemah, has previously called the $164 million estimate a “best-case scenario” and warned that annual state costs for Medicaid expansion could reach $246 million in the pending state-budget year.

If all 628,000 eligible Oklahomans enrolled in Medicaid, the state cost could soar as high as $374 million annually.

In 2018, the Foundation for Government Accountability found states that expanded Medicaid signed up more than twice as many able-bodied adults as predicted and experienced cost overruns of 157 percent.

To cover most of the predicted $164 million increase in state Medicaid expenses, Stitt’s budget calls for raising a fee on certain hospitals’ revenue to 4 percent.

Ray Carter Director, Center for Independent Journalism

Ray Carter

Director, Center for Independent Journalism

Ray Carter is the director of OCPA’s Center for Independent Journalism. He has two decades of experience in journalism and communications. He previously served as senior Capitol reporter for The Journal Record, media director for the Oklahoma House of Representatives, and chief editorial writer at The Oklahoman. As a reporter for The Journal Record, Carter received 12 Carl Rogan Awards in four years—including awards for investigative reporting, general news reporting, feature writing, spot news reporting, business reporting, and sports reporting. While at The Oklahoman, he was the recipient of several awards, including first place in the editorial writing category of the Associated Press/Oklahoma News Executives Carl Rogan Memorial News Excellence Competition for an editorial on the history of racism in the Oklahoma legislature.

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