An empty hospital bed is seen at the now-closed Pauls Valley Regional Medical Center in October 2018. Supporters of Medicaid expansion say it will help improve the financial viability of many struggling rural hospitals in the state. Some health experts caution, however, that other factors are involved in the plight of rural hospitals, including the levels of Medicare reimbursement and declining rural populations. (Whitney Bryen/Oklahoma Watch)
An ongoing series on efforts in Oklahoma to extend health coverage to thousands of uninsured people through Medicaid expansion or other approaches. The coverage is enabled by a grant from The Anne & Henry Zarrow Foundation.

Medicaid expansion is inching closer to reality in Oklahoma.

Legislative leaders announced a budget deal Monday that includes funding to expand the state’s Medicaid program and extend health coverage to more than 220,000 low-income residents.

If approved by the full Senate and House in votes expected later this week, and then signed into law by Gov. Kevin Stitt, Oklahoma could start signing up new enrollees in less than two months.

But confusion and uncertainty remain on how Medicaid expansion would look in Oklahoma – or whether it will take root in a state that rejected expansion the past six years. There’s a Medicaid expansion state question, potential lawsuits and a pending decision by the federal government to allow Oklahoma to add restrictions on expansion recipients.

Here’s a look at potential scenarios for the coming weeks and months.

Scenario #1: Expansion, Followed by a ‘No’ Vote

Under Stitt’s SoonerCare 2.0 plan, the move to extend Medicaid eligibility for adults ages 18 to 64 who earn up to 138 percent of the federal poverty level – or an annual salary of $17,236 for an individual or $35,534 for a family of four – would be just the first step.

Stitt proposes to follow up by asking the federal government to approve a waiver request allowing the state to set conditions that expansion enrollees must meet to remain eligible. Those include requiring thousands of new recipients to pay premiums of up to $120 per year and be subject to work requirements.

Oklahoma also seeks a waiver to use a block-grant funding model for low-income adults that would set caps on Medicaid costs in coming years.

The Stitt administration submitted its waiver application last month. Health officials hope the federal government will approve the request this fall, allowing it to take effect July 1, 2020.  

The governor’s plan, however, depends on voters shooting down State Question 802.

The ballot measure, similar to the first stage of Stitt’s plan, would expand Medicaid eligibility to those making up to 138% of the poverty level.

But a critical difference is it says “the state cannot create additional restrictions that make it more difficult to qualify for expanded Medicaid coverage than it is to qualify for the Medicaid program currently in place.”

This would effectively block any of Stitt’s waiver changes that would restrict eligibility that aren’t currently part of the state’s core Medicaid program.

In addition, SQ 802 would be a constitutional amendment, meaning the governor or lawmakers couldn’t make changes without approval from the electorate.

But if the question fails, Stitt’s plan will be back on track. Other pitfalls loom, however.

Democrats and health advocates have already promised lawsuits to challenge the Medicaid changes. If voters oust President Donald Trump from the White House in November, a new Democratic administration could restrict use of waivers to tighten eligibility.

A nurse talks to someone who is about to be tested for COVID-19 at the Chickasaw Nation Purcell Health Clinic on April 28. Health concerns over COVID-19 could play into voters’ and lawmakers’ decisions on Medicaid expansion, but opponents still question the costs. (Whitney Bryen/Oklahoma Watch)

Scenario #2: Expansion, Followed by a ‘Yes’ Vote

Expansion advocates could have their cake and eat it too if Stitt and lawmakers enact Medicaid expansion this year and voters approve the SQ 802 on June 30.

Not only would Medicaid expansion begin July 1, the question’s constitutional protections would immediately block lawmakers and the governor from restricting eligibility.

Funding for the expansion would also be in place, because lawmakers’ budget deal includes using $133 million from an increased provider fee paid by hospitals and $30 million in savings to pay for the state’s costs. About 90% of expansion would be paid by the federal government.

Scenario #3: No Expansion, Followed by a ‘Yes’ Vote

The funding bills could still be rejected by lawmakers or by a Stitt veto.

For now, the Legislature and the governor’s office are at an impasse over the budget; Stitt hasn’t said whether he will support the package of bills announced Monday.

If the Legislature ends the session in late May without an agreement on expansion funding, Stitt’s SoonerCare 2.0 essentially will be dead on arrival.

That would put the fate of Medicaid expansion in the hands of voters. If they approve the state question, they will, for the most part, find themselves in Scenario #2. Except for the start date.

SQ 802 states that Oklahoma begin implementing Medicaid expansion by July 1, 2021. The yearlong delay could come at critical time when health concerns have risen over the coronavirus pandemic.

The funding issue would also persist, because the ballot measure doesn’t specify where the money would come from. Instead, lawmakers would again have to find the funding – only this time with a constitutional mandate attached.

Scenario #4: No Expansion, Followed by a ‘No’ Vote

This scenario would put the state back to where it started.

Oklahoma, one of 14 states that have resisted Medicaid expansion, could stay its course if lawmakers don’t secure funding for Stitt’s SoonerCare 2.0 plan and if voters reject SQ 802.

Supporters of rejecting Medicaid expansion say it will prevent extreme and costly growth in the program, especially if the federal government later reneges on its pledge to cover 90% of the costs.

Supporters of expansion say it will go a long way toward improving the poor health outcomes of many in the state, which has the second highest uninsured rate in the country.

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