Legislature tackles major issues of Medicaid expansion funding, budget agreement (Capitol Update)

At the beginning of last week, legislators had two big policy issues to resolve before the end of session: The state budget and Medicaid. The job on Medicaid expansion was made easier by the availability of federal funds for use as the state match. Predictions of a tax increase if State Question 802 mandating Medicaid expansion passed proved to be unfounded. In fact, the proposed budget will both fund Medicaid expansion and pass corporate and individual income tax cuts.

A deal on Medicaid managed care has been more elusive. It appears at this point Senate Bill 131 that would shift managed care from private insurance companies to the Oklahoma Health Care Authority will not get a hearing in the Senate as written. Legislators are drafting “guardrails” language to insert in either SB 131 or another bill to protect Medicaid providers like physicians and hospitals from feared abuses by the managed care organizations (MCOs). Once managed care goes into effect, providers will have to rely on the MCOs to authorize the type and length of treatments and to make adequate and timely payment while trying to make a profit for themselves.  

On the budget, legislators announced a deal last Thursday between the legislative leadership and the Governor. Apparently, the House’s tax cut proposal had been one of the issues hanging up negotiations. The stalemate was broken when a deal was struck for the tax cuts the House wanted and an increase in the so-called Equal Opportunity Scholarships tax credit the Senate wanted. 

The opportunity scholarships are available to qualified students in public schools and private schools with private money donated for that purpose. Donors receive a 50 percent tax credit the first year and a 75 percent credit if they donate a second year. The controversial tax credit is a taxpayer subsidy to private schools. Currently the private school opportunity fund is capped at $3.5 million, and the public school fund is capped at $1.5 million. Under the budget proposal, the cap for both funds will be raised to $25 million.

The numbers released on Thursday are broad agency funding numbers. The particulars of agency budgets will come this week when more detailed information is provided, and budget limitation bills are introduced and passed. The Legislature will likely pass all appropriations and limits bills this week to give themselves the five-day cushion for overriding gubernatorial vetoes. Once that is done, they may or may not stay another week to handle a number of other bills waiting for floor action.


Steve Lewis served as Speaker of the Oklahoma House of Representatives from 1989-1990. He currently practices law in Tulsa and represents clients at the Capitol.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.