Education, Health Care

Medicaid diverting money from education

January 14, 2021

Ray Carter

A top state official told lawmakers one reason Oklahoma spends less on education today is because the state’s Medicaid program is consuming more and more taxpayer resources.

During a budget hearing conducted by the Senate Appropriations Subcommittee on Education on Thursday, Glen D. Johnson, chancellor of the State Regents for Higher Education, noted that Oklahoma colleges received a larger state appropriation in 2001 than they did in 2020.

“Some may ask, ‘If that’s happening for higher ed, where are areas that are increasing?’” Johnson said. “I know that as members of the Appropriations Committee you know that—particularly in areas like health care with Medicaid, corrections—those areas, because of a variety of factors, have received a larger share of state appropriation.”

According to the Oklahoma Health Care Authority, enrollment in Medicaid more than doubled over 20 years—increasing from 490,282 in 1999 to 998,209 in 2019, leaving roughly one in four Oklahomans on the welfare program.

From 1999 to 2019, total expenditures on Medicaid in Oklahoma—adjusted for inflation and including both state-and-federal dollars—surged from $2.33 billion to $5.6 billion.

The program’s costs are poised to increase further this year following passage of an initiative measure that expanded Medicaid to include up to 628,000 able-bodied Oklahomans. Lawmakers will have to find funding to cover the cost of that expansion.

While supporters of expansion claimed it would require $164 million in new state spending, within weeks of the initiative’s passage the top budget chairman in the Oklahoma Senate warned that cost estimates had already surged to $246 million.

The expansion could cost even more. Based on current Medicaid expenses and a previous study commissioned by the Oklahoma Health Care Authority that predicted up to 628,000 Oklahomans would become eligible under expansion, the state cost of Medicaid expansion could be as much as $374 million annually.