Health Care

Thousands added to Medicaid through expansion already have coverage

March 20, 2020

Ray Carter

As Oklahoma expands its Medicaid program to include up to 628,000 able-bodied adults, one feature of the expansion that is often overlooked is that tens of thousands being added to the program already have coverage or access to care.

At the same time, state officials appear to still need valid numbers on how many people who already receive taxpayer-funded coverage or treatment elsewhere will now be added to Medicaid, even though officials cite specific cost-projections associated with those groups.

Among those facing dramatic changes in coverage are Oklahomans on the Insure Oklahoma program, a Medicaid-waiver program that purchases private insurance policies for individuals and small-business employees. That program is funded by state-federal Medicaid dollars, employer contributions, and worker premiums.

During a recent virtual forum to discuss Oklahoma’s Medicaid expansion, Traylor Rains, deputy state Medicaid director at the Oklahoma Health Care Authority (OHCA), was asked about Insure Oklahoma participants.

“Will this program take the place of Insure Oklahoma individual plan?” Rains said. “Good question. It will.”

Typically, private market policies provide access to a greater range and quality of medical providers than Medicaid, because private plans pay better than Medicaid. But Rains described the loss of private policies as a benefit to working Oklahomans on the Insure Oklahoma program.

“We would roll them into the adult-expansion population effective July 1,” Rains said. “This is actually a good thing for these clients because they will no longer have those premiums assessed for the next year.”

OHCA’s annual report for the 2019 state budget year, the most recent such report available, showed that 31,005 individuals had coverage through Insure Oklahoma that year.

Rains said about 9,000 individuals currently covered by the employer side of the Insure Oklahoma program earn too much to receive Medicaid coverage even under the expansion plan. Those individuals will become uninsured as a result of Medicaid expansion, and Rains said they will be encouraged to apply for federal subsidies to buy policies off the “Obamacare” exchanges created by the federal Affordable Care Act.

At the same time, two other groups already receiving taxpayer-funded care—some individuals in state prisons and some served by the Oklahoma Department of Mental Health and Substance Abuse Services (ODMHSAS)—will also be added to Medicaid through expansion.

But it appears lawmakers have no valid numbers for the size of the latter two populations—even though they are hoping for millions in “savings” from cost-shifting those individuals’ treatment from state-funded programs to the federal-state funded Medicaid program.

Treatment for both groups is currently fully funded by the state government. Under Medicaid expansion, the cost of those individuals’ treatment will be split between the state and federal government, changing the payment method but not access to care for those groups.

Sen. Roger Thompson, an Okemah Republican who chairs the Senate Appropriations Committee, said officials expect to save about $13.3 million through cost-shifting to the federal government for those two groups. Of that total, Department of Corrections inmates who are within six months of release are expected to account for about one-third of savings, he said.

While officials have specific dollar amounts associated with the two groups, they appear to lack valid headcounts for both groups.

“I don’t have that broken down into people,” Thompson said.

“On mental health, I’m sure that number exists, but I don’t have it,” said Sen. Greg McCortney, R-Ada.

McCortney said finding an exact figure for the Department of Corrections population that will be moved onto Medicaid has proven difficult, pointing to shifting answers from federal authorities.

During his recent presentation, Rains referenced both groups but did not provide a headcount for either.

Rains said “a lot” of the state share of Medicaid expansion cost will “come from savings that the state is realizing by bringing in federal dollars to subsidize care that is currently, across our state, being paid for with 100 percent state dollars.” He said a “good example” of those savings are individuals with earnings below 133 percent of the federal poverty level who lack insurance coverage but are nonetheless now “receiving treatment through the Department of Mental Health and Substance Abuse Services.”

“We would now be able to bring in federal dollars for those folks,” Rains said.

He said 60 percent to 70 percent of individuals served by the Oklahoma Department of Mental Health and Substance Abuse Services would be added to the Medicaid program.

In 2018, the ODMHSAS reported that 197,000 Oklahomans were receiving services through the ODMHSAS statewide community services network. If 70 percent of those individuals are shifted to Medicaid, that would translate to around 137,000 individuals.

Rains said the OHCA expects only 200,000 individuals to be eligible for Medicaid expansion and that just 160,000 will sign up in the first year. If that population includes 137,000 people currently served by ODMHSAS, around 20,000 people now on Insure Oklahoma, and an undetermined number of people now in prison but nearing the end of their sentence, that suggests the vast majority of people added to Medicaid through expansion will be individuals already receiving coverage and treatment today.

However, the 200,000 figure contrasts dramatically with the findings of a previous report on Medicaid expansion commissioned by the OHCA. That report predicted up to 628,000 Oklahomans would become Medicaid-eligible under expansion.

For this story, requests for information on the number of prison inmates and individuals in the mental-health category who would be shifted to Medicaid under expansion were submitted to the Department of Corrections, ODMHSAS, the leadership of the Oklahoma House of Representatives, and the governor’s office. None were able to provide figures as of publication.