OKPOLICY.ORG
The Legislative Office of Fiscal Transparency (LOFT) issued its Rapid Response Evaluation Report on Sept. 10 reviewing the funding sources for the Oklahoma Health Care Authority (OHCA) and the findings were delivered to the Joint LOFT Oversight Committee last Wednesday. OHCA is the state’s Medicaid agency that provides medical benefits and services to low-income children and adults and qualifying aged and disabled persons through Medicaid and the Children’s Health Insurance Program (CHIP).
According to the report, OHCA derived its revenue from 10 different revenue sources, totaling nearly $10.4 billion in Fiscal Year 2023, which ended June 30, 2024. The $7.5 billion in federal funds and $1.1 billion in legislative appropriations are the first and second largest sources of revenue, respectively. State appropriations to the agency reached a decade low in 2016 and peaked in 2019.
After 2019, state appropriations decreased as the federal government increased its funding. Federal funds to the agency increased in 2020 due to enhanced funds for the COVID-19 public health emergency. Additional federal funds on top of that came for Medicaid expansion, which extended Medicaid eligibility to adults aged 19 to 64 with income less than 138 percent of the federal poverty level. Medicaid expansion, which was passed by Oklahoma voters in 2020, yields a higher federal contribution than other Medicaid programs.
Interestingly, LOFT reports the legislature, as it has done in other areas of state government, has created a large cash fund at OHCA. The “Rate Preservation Fund” was created in 2019 with a $29 million appropriation to cover any future decrease in federal funding. In 2020, the fund was amended to add the purpose of “maintaining” provider rates.
The legislature has appropriated money into the Rate Preservation Fund every year and as of the end of Fiscal Year 2024 (ending June 30, 2024), the fund had a balance of $495 million. In 2022, the legislature appropriated a total of $30 million out of the fund to cover operations at all three agencies that administer Medicaid programs. Another $100 million was added to the fund in Fiscal Year 2025, which will increase the balance to nearly $600 million.
The LOFT report estimates the $600 million Rate Preservation Fund balance will allow Oklahoma to preserve provider reimbursements for approximately three years if the federal contribution for Medicaid and CHIP were lowered by 2.7 percent. This reduction level represents the average federal reduction of both Medicaid and CHIP contribution rates over the past 20 years.
A recent article from a national online health care publication found that Oklahoma ranked 50th followed only by South Dakota at 51st in a state-by-state and District of Columbia comparison of state Medicaid and CHIP programs comparing cost, quality, and access. The top five states are Connecticut, New York, California, Massachusetts and Minnesota. The bottom five states are Idaho, Kansas, Georgia, Oklahoma, and South Dakota.
When Oklahoma lawmakers choose to sock away $600 million to sit in an another “rainy day” account – rather than using it to improve access and quality of health care for qualifying low-income adults and children and the aged and disabled – it will continue the inadequate funding that keeps Oklahoma at the bottom of the heap for health care.
As a result, for lack of better care, Oklahoma will continue to experience the economic and social outcomes caused by poor health, mental health, and addiction. Perhaps it’s unrealistic to aspire to be a “top 10 state” in providing health care for low-income, elderly and disabled individuals and families. But it could help a lot of people if we at least strived to be average, like Louisiana (24th), New Hampshire (25th), or Michigan (26th).
