During the last state fiscal crisis, from 2002 -04, funding for Oklahoma’s Medicaid program was hit hard. In FY ’02 and FY ’03, as revenues began to plummet, the Oklahoma Health Care Authority (OHCA) put coverage of almost all non-mandatory benefits and eligibility categories on the table for cuts. The agency ended up eliminating dental coverage for adults, reducing prescription drug coverage for seniors and persons with disabilities in home- and community-based waivers, limiting hospital in-patient coverage, and abolishing the medically needy eligibility program for individuals facing large medical bills, among other measures. Only an 11th-hour promise of supplemental funding by legislative leaders and some serious arm-twisting led OHCA’s Board to reverse a decision that would have eliminated eligibility for over 50,000 low-income children and pregnant women.

This time around, the prospects for the Medicaid program look considerably less precarious. The stimulus bill passed by Congress in February made available to the states large increases in the federal matching rate, known as FMAP, on the condition that states maintain Medicaid eligibility rules at pre-downturn levels. Recent guidelines released by the Centers for Medicare and Medicaid Services spell out the maintenance of eligibility requirements with which states must comply to receive their enhanced FMAP.  In addition to being prohibited from eliminating coverage for any group or sub-group covered under the state plan or a home- and community-based waiver, states are also barred from implementing any eligiblity standards, methodologies, or procedures that are more restrictive than those in effect on July 1, 2008. Specifically, a state may not:

• Institute new or increased premiums;
• Reduce occupied capacity or slots for waiver programs;
• Reduce income or resource standards, or implement more restrictive methodologies for determining financial eligibility; or
• Introduce more stringent or restrictive processes or procedures for determining eligibility.

In other words, not only will states be precluded from reducing income eligilbity directly, they will not be able to adopt backdoor tactics, such as new application procedures, that could keep eligible recipients out of the program.

Oklahoma has already received $174 million in enhanced FMAP and expects to benefit to the tune of perhaps $960 million through the end of CY 2010. This funding will not only mitigate cuts to health care, but is likely to free up state dollars to preserve other essential state services.  In return for this level of investment, the federal government is doing the right thing by making sure that Medicaid eligibility standards remains in place for the low-income populations the program serves.