Last year’s vote to expand Oklahoma’s Medicaid program will provide the state with a half-billion-dollar windfall thanks to the recently passed federal stimulus bill.
Oklahoma Health Care Authority officials confirmed this week that the state will qualify for a provision in the American Rescue Plan Act that adds a new incentive for the 12 states that have yet to expand their Medicaid programs.
Last June, voters narrowly approved State Question 802, which will extend health coverage to an estimated 200,000 Oklahomans. The expansion officially takes effect July 1.
Since Oklahoma was considered a non-expansion state when the bill passed earlier this month, Oklahoma Health Care Authority Chief Financial Officer Aaron Morris said federal authorities have told the state that Oklahoma will qualify for the incentive.
“We had not heard until the first version of the bill came about that (the incentive) was moving forward,” he said. “So it’s welcome news and good timing.”
The new incentive seeks to entice remaining non-expansion states to reconsider by making only these states eligible for a 5-percentage-point increase in the matching rate the federal government provides states for their regular or traditional Medicaid program.
The enhanced funding lasts for two years, starting when a state begins the expansion.
For Oklahoma, Morris said they estimate this will bring in $500 million over the two-year period with the new enhanced rate taking effect July 1. A Kaiser Family Foundation report projects Oklahoma will receive slightly more — $520 million — over the two years.
The American Rescue Plan Act was passed in Congress along party lines. All seven members of Oklahoma’s all-Republican congressional delegation voted against the bill.
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State lawmakers, meanwhile, have not yet said how they hope to spend — or save — the previously unanticipated money. Legislative leaders have cautioned previously that they don’t want to use one-time funds to pay for the expansion, which has an estimated annual price tag of $164 million.
Aside from the funding issue, lawmakers are also reviewing whether to challenge Gov. Kevin Stitt’s push to privatize the state’s Medicaid program by outsourcing patient management to for-profit companies.
That means state leaders still have several big decisions to make in the coming weeks. Lawmakers have until May 28 to conclude this year’s session.