Legislature takes action to fund Medicaid expansion (Capitol Update)

The complicated picture of Medicaid expansion in Oklahoma is beginning to clear as a result of actions taken by the Legislature last week. The Affordable Care Act was signed into law in March 2010. As passed, it guaranteed health care to low income citizens through expansion of Medicaid. However, in 2012 the U.S. Supreme Court ruled expansion was optional for each state. Oklahoma has remained among the 14 states that refused to expand coverage. Last year a petition resulting in SQ 802 was filed and successfully circulated putting Medicaid expansion in the Oklahoma constitution, thereby eliminating the legislature’s or governor’s ability to limit its coverage. 

The Governor, announcing his intention to defeat State Question 802, recently directed the Oklahoma Health Care Authority to submit a state plan amendment he called SoonerCare 2.0 to the federal government. The proposal would expand Medicaid to low-income individuals beginning July 1, 2020. However, this is an administrative action subject to change at any time. As anticipated, he did make changes by directing OHCA to submit a new state plan amendment that would, among other things, enact a per-person expenditure cap, charge premiums for the expansion population, require community engagement (work reporting) requirements, and develop a “managed care” delivery system. 

One of the important guarantees of the Affordable Care Act is the prohibition of private health care carriers from imposing a cap on per person expenditures in insurance policies. This prevents insurance companies from cutting off health care coverage when the cap is reached. I am not sure how the “per capita cap” financing contained in SoonerCare 2.0 relates to this, but it bears scrutiny as to whether the cap would endanger this ACA benefit for low-income Oklahomans. In addition, premium and work requirements will limit the number of people covered. 

With SoonerCare 2.0 beginning July 1, 2020, the Legislature was tasked with funding it during this session. To accomplish that, last week legislators passed Senate Bill 1046 and SB 1935. SB 1046 raised the cap on the Supplemental Hospital Payment Program (SHOPP) fee from 2.3 percent to 4.0 percent for FY 2021 but prohibits the use of funds generated from being used for managed care. Because the timing and extent of the needed funds is difficult to estimate, SB 1935 simply authorizes the Office of Management and Enterprise Services to transfer from the Revenue Stabilization Fund an amount necessary to fund the newly eligible Medicaid population, less the funding provided by SB1046. These funds together should fund SoonerCare 2.0 beginning July 1, 2020. 

To guarantee full Medicaid coverage for low-income Oklahomans and prevent the health care coverage limitations in SoonerCare 2.0, the people can pass SQ 802 on June 30. If that happens, it will be up to the Governor whether to withdraw his expansion proposal and delay Medicaid expansion implementation until July 1, 2021. One would have to think that if the people express themselves in favor of full Medicaid expansion, he will leave full expansion without limitations in effect beginning July 1, 2020, as funded by SB 1046 and SB 1935, with future years to be permanently funded by the legislature in next year’s session. 



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.

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