Health care reform’s Medicaid expansion is right for Oklahoma

The Supreme Court’s landmark ruling upholding the bulk of the Affordable Care Act (ACA) struck down one key component of the law: it made the law’s Medicaid expansion optional rather than mandatory by declaring that that the federal government may not withhold all Medicaid funding for states that opt not to expand Medicaid coverage.

Oklahoma now can choose not to expand Medicaid to cover more people without insurance living below the poverty line.  But such a choice would squander the chance for as many as 180,000 struggling Oklahomans to get health insurance coverage and leave hospitals and other health care providers on the hook for uncompensated medical care.

The choice for Oklahoma – and other states – should be simple. Under the Affordable Care Act, the federal government will pick up the bulk of the tab for expanding Medicaid (as we discussed at length in this issue brief and this blog post).  It will cover 91.7 percent of the cost of providing health insurance to between 137,000 and 180,000 Oklahomans between 2014 and 2020, according to the Oklahoma Health Care Authority’s estimates. While the state would assume a small portion of the cost for this population, these costs would be at least partly offset by state savings associated with serving a smaller indigent population.

Who are the people who would be shut out of Medicaid if Oklahoma opts against the expansion?  The very Oklahomans who are struggling the most: primarily working-poor parents and other adults who work for low wages and are either not offered employer-based coverage or can’t afford it.  Right now, if you have children but earn more than $7,000 a year (for a family of three), you make too much money to qualify for Medicaid in Oklahoma.  And if you don’t have kids, you can’t qualify for Medicaid at all, no matter how little money you make.

If Oklahoma chooses not to expand Medicaid, many of those who would have gained coverage under the expansion will have no options.  That’s because, as Judy Solomon of the Center on Budget and Policy Priorities explains, the Affordable Care Act assumes that adults with incomes below the poverty line will enroll in Medicaid so it does not make this population eligible for tax credits to purchase coverage in the new state health insurance marketplaces – called exchanges – that are slated to launch in 2014 under the health reform law.  In effect, Oklahoma would be creating a crater-sized ‘coverage hole’ into which adults below the poverty line would fall.

Even if Oklahoma chooses not to expand Medicaid to cover its own low-income uninsured, Oklahoma taxpayers will be funding the federal share of Medicaid costs in other states that choose to participate. It would be hard to explain why Oklahomans are paying for health insurance coverage for low-income New Mexicans and Oregonians but not for low-income Oklahomans. And it would be ever harder to explain that Oklahoma legislators are receiving publicly-funded health insurance at taxpayer’s expense yet denying coverage to their poorest constituents.

As much as some Oklahoma politicians may be tempted to adopt an uncompromising oppositional stance towards the Affordable Care Act, leaving the lowest-income adult population out in the cold by turning down the enhanced federal match would be contrary to the state’s interests and lacking in basic compassion and common sense.