After Years of Legislative Inaction, Voters Say Yes to Medicaid Expansion

After years of debate and aborted legislative proposals, voters have done what Oklahoma lawmakers have long resisted.

With a razor-thin 50.5% of the vote, Oklahomans approved a state question Tuesday to expand the state’s Medicaid program and extend health coverage to an estimated 215,000 low-income adults. 

Tuesday’s vote capped off a long-running and high-stakes dispute in the State Capitol over whether Oklahoma should join the 36 other states that have accepted the expansion, a key part of former President Barack Obama’s Affordable Care Act that the U.S. Supreme Court ruled in 2012 states could decide whether to adopt. 

Democrats have long argued for the expansion, which would extend Medicaid eligibility to adults making up to 138 percent of the federal poverty level ($17,236 for an individual or $35,534 for a family of four).

They argued that since the federal government would pay 90% of the estimated price tag of more than $1 billion, that this was the biggest and most actionable step the state could take to bring down Oklahoma’s 14.2% uninsured rate. That rate is the second highest in the nation, next to only Texas.  

But the proposal has faced widespread skepticism by Oklahoma Republicans, who warned the state’s cost would still be too much, the federal government would eventually shift more of the cost to states and the state would have to respond by raising taxes or cutting costs elsewhere. 

BREAKING: With 100% precincts reporting in, #SQ802 has passed and Oklahoma will become the 37th state to pass Medicaid expansion.

State officials project 215,00 low-income adults will become newly eligible for health coverage when the expansion takes effect by July 1, 2021 pic.twitter.com/pDJHze6Efu

— Oklahoma Watch (@OklahomaWatch) July 1, 2020

Many in the state’s Republican party, however, would come around to supporting a version of the expansion, as long as they could make Oklahoma-specific tweaks to the program.

In 2016, then-Gov. Mary Fallin, along with former Health Care Authority Executive Director Nico Gomez, endorsed what they called the “Medicaid rebalancing act.” This ill-fated plan proposed to use Medicaid fund dollars to buy private insurance for low-income adults who would otherwise be eligible under traditional expansion programs.  

But although it gained some support from Republican leaders, the plan was largely dead on arrival by the time the Legislature took it up, as lawmakers killed the proposal without even voting on it. 

Stitt then seemed to be on the cusp of accepting the expansion earlier this year. His two-phase SoonerCare 2.0 plan called for the state to begin implementing the expansion this July and then follow that up by seeking a federal waiver to move to a block-grant model, add work requirements and require many enrollees to pay up to $120 in premiums per year.

Lawmakers backed Stitt’s proposal as they passed a pair of bills this year that would have increased hospital provider fees and used savings to pay for the projected $164 million in the state’s share of the costs. 

Stitt, however, vetoed the funding proposal — even though he earlier proposed the key funding measure of increasing the fee hospitals pay — and dashed hopes for an expansion in 2020. He cited the economic uncertainty in light of the COVID-19 pandemic as one of the reasons for going back on the plan. 

But like in other states that resisted the expansion, it was the voters who finally gave it the green light. 

Following Tuesday’s vote, Oklahoma now joins Utah, Idaho and Nebraska in approving the expansion though a ballot measure. 

Oklahoma is also, notably, the first state to pass Medicaid expansion through a constitutional amendment. 

That means if the governor or the Legislature want to roll back or change the provision, it will take another vote of the people to do so. 

What’s Next

Tuesday’s vote, while a milestone, isn’t the end of Oklahoma’s Medicaid expansion debate. 

The state question is silent on the question of how Oklahoma will pay for its share of the costs. The Oklahoma Health Care Authority estimated the price at $164 million, but it’s unknown if that amount will change due to the economic conditions caused by the pandemic when the expansion takes effect by July 1, 2021. 

This means the Legislature will be tasked with finding the money, whatever it is, during the 2021 legislative session running from February to May. 

Stitt, who opposed the state question, has repeatedly said that savings alone will not cover the expansion costs and that tax increases or budget cuts will be needed. He said he doesn’t support hiking taxes, which could mean cuts from key agencies, including education and public safety, are likely.

“The questions Oklahomans need to ask themselves is how do we pay for it,” Stitt said Tuesday before the results came in. “We don’t have an extra $200 million just sitting around.”

But Democrats have rejected that argument. 

Sen. Carri Hicks, D-Oklahoma City, said in an interview before Tuesday’s vote that lawmakers have several options that don’t involve cuts or tax increases. 

She said this includes rehashing some of Stitt’s funding proposal for his SoonerCare 2.0 plan, including increasing the hospital provider fee. According to legislative estimates, that would bring in $134 million a year, or more than 80% of the $164 million projected cost of the expansion.

“If anything, this legislative session showed us there are multiple ways to fund expansion, even in challenging budget years,” she said. “The Senate Democrats will thoughtfully consider whatever proposals are brought forth.”

Election Day in images

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