Health Care

Oklahomans deserve better than Medicaid expansion

March 5, 2019

Tom Newell

This is a guest piece written by Tom Newell, government affairs director at the Opportunity Solutions Project and a former member of the Oklahoma House of Representatives.

A bill moving through the Oklahoma Legislature has been touted by some as a new plan to “rebalance” Medicaid and find a conservative alternative to Medicaid expansion. In reality, Senate Bill 605 adopts Medicaid expansion under a pseudonym and shifts existing federal burdens onto Oklahoma taxpayers.

The proposal expands Medicaid eligibility to the entire Obamacare expansion population of able-bodied adults, uses Obamacare expansion funding to do so, and is subject to all Obamacare regulations.

Call it what you will, but the bottom line is the same: SB 605 is Medicaid expansion—and it creates a new entitlement program for able-bodied adults.

Medicaid was created to provide access to health care for low-income pregnant women and children, the disabled, and the elderly. But under this proposal, the program will be expanded to able-bodied adults in their prime working years who have no dependents.

According to the Lewin Group, more than half of new would-be Medicaid expansion enrollees are currently enrolled in private health insurance. Many of these able-bodied adults already receive generous subsidies to purchase private insurance on the Obamacare exchange, but by moving them onto Medicaid, Oklahoma taxpayers will be left to foot the bill for a portion of their Medicaid costs.

How much will that cost be? No one knows—but estimates aren’t looking good for Oklahoma taxpayers.

Several years ago, the Oklahoma Health Care Authority predicted that 175,000 able-bodied adults would enroll in the state’s Medicaid expansion. That estimate has already risen to 270,000 people.

And considering what the reality of expansion has looked like—and cost—in every other state, Oklahoma policymakers would do well to proceed with caution.

In Illinois, the state predicted 380,000 able-bodied adults would ever be eligible for Medicaid expansion, but by 2017, over 651,000 individuals were enrolled in the program. In Kentucky, cost overruns for Medicaid expansion totaled $1.8 billion in just the first 18 months of operation. Even in Alaska—a state with one-fifth the population Oklahoma—actual Medicaid expansion enrollment was nearly 52 percent higher than estimated projections and cost overruns totaled nearly $200 million.

The three other states that have already attempted the “innovative” delivery model outlined in SB 605 have had similar—or worse—results. Massive cost overruns, premium increases, and decreasing insurance options led Iowa to completely end its plan after just 18 months. New Hampshire ended its plan last year after determining the model was twice as expensive as traditional Medicaid expansion, and Arkansas lawmakers are currently considering ending their plan for the very same reason—while also implementing commonsense welfare reforms to stop the bleeding and preserve resources for the truly needy.

Oklahoma can avoid the fallout that every single state that expanded Medicaid has experienced. Instead of inviting budgetary crises, shifting costs to taxpayers, and creating a class of able-bodied welfare recipients, Oklahoma lawmakers can reject Medicaid expansion once and for all. It’s time to abandon Medicaid expansion and refocus our energy on protecting the truly needy and promoting opportunity for able-bodied Oklahomans.