How Much Would Extending Medicaid Cost?

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Accepting federal funds to extend Medicaid would involve modest state costs while generating enormous economic and health benefits

In Oklahoma, one in two low-income adults lack health insurance. They struggle to access timely, appropriate care for chronic and acute health problems. Hospitals and other providers who care for those without insurance must absorb huge uncompensated care costs. These costs are passed on to all Oklahomans in the form of higher charges and insurance premiums.

The Affordable Care Act (ACA) provides Oklahoma the chance to accept federal dollars to extend Medicaid health coverage to Oklahomans with income up to 138 percent of the federal poverty level. However, Governor Fallin has announced that Oklahoma will not participate in the extension of Medicaid, arguing that to do so would be unaffordable.

A November 2012 report from the Kaiser Commission on Medicaid and the Uninsured shows that accepting federal funds to extend Medicaid would involve modest state costs while generating enormous economic and health benefits. According to the Report:

state-and-federal

  • Extending Medicaid eligibility would provide access to health coverage for 126,000 currently uninsured Oklahomans.
  • From 2013-2022, the federal government would spend an additional $8.561 billion on the newly-eligible Medicaid population, or more than $12 for every dollar in state spending. The federal government would assume 92.5 percent of the total cost of expansion from 2013-2022.
  • Extending eligibility would increase state Medicaid spending by $689 million over ten years (2103-2022). This additional coverage would lead to $205 million less in uncompensated care costs, reducing the net state cost to $485 million.

These amounts do not take into account savings from shifting services currently paid for with state-only dollars to Medicaid, estimated to be $48 million annually. Nor do they include revenue gains from the boost to state economic activity resulting from increased federal dollars.

  • The state cost is projected to be just $11 million in 2016, which is less than the $23 million the state would save that year in uncompensated care costs.
  • Extending Medicaid eligibility would increase state spending on Medicaid by just 2.7 percent from 2014 – 2022.
  • Medicaid payments to Oklahoma hospitals alone would increase by $3.6 billion from 2013-2022.

fast-facts

For more information on Medicaid in Oklahoma, go to https://okpolicy.org/medicaid-and-the-affordable-care-act.

ABOUT THE AUTHOR

Gene Perry joined OK Policy in January 2011. He is a native Oklahoman and a citizen of the Cherokee Nation. He graduated from the University of Oklahoma with a B.A. in history and an M.A. in journalism. Gene also serves on the board of the Oklahoma Sustainability Network, is a trustee of the Oklahoma Foundation for Excellence, is a member of Investigative Reporters and Editors, and has chaired the communications advisory committee for the State Priorities Partnership, a nationwide network of state fiscal policy think tanks. He lives in Tulsa with his wife Kara Joy McKee, who is a Tulsa City Councilor.

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