OKPOLICY.ORG
Oklahoma’s approximately $3 billion Medicaid (SoonerCare) managed care program is likely to remain a prominent public policy and political issue for the foreseeable future. Known as SoonerSelect, it covers hospital and physician services as well as dental care, mental health care, and substance use treatment for nearly 600,000 low-income individuals and families.
Recently, Attorney General Gentner Drummond and Governor Kevin Stitt have engaged in back-and-forth sparring about SoonerSelect. On May 1, Drummond requested that State Auditor and Inspector Cindy Byrd audit the Oklahoma Health Care Authority (OHCA), which CEO Clay Bullard, a Stitt appointee, currently leads.
In his request, Drummond said that “Providers are reducing staff. Patients are being denied essential care. Out-of-state corporations are controlling access to critical services without accountability, provider and patient complaints are increasing, and OHCA leadership highlights the MCOs’ (insurance companies) numbers to deny that these problems persist.”
Stitt responded with a letter to Drummond directing him “to cooperate with The Trump administration’s audit of Medicaid Fraud Control Units, located in the AG’s Office, and ensure that Oklahoma taxpayer dollars are not being misused.”
Drummond replied with a press release, saying that the governor and OHCA have chosen to defend the insurance companies rather than the people they serve. Drummond said Oklahoma leads the nation in Medicaid fraud enforcement and that he will be meeting with Vice President JD Vance next week to discuss Oklahoma’s success.
Stitt has now called for a special audit of the Attorney General’s office, complaining of increases in its budget over the past 3 years. Drummond countered that the Legislature gave the AG additional duties because of its confidence in the office and accused Stitt of having “a well-established habit of siccing auditors on anyone who refuses to bow to him.”
During Stitt’s first term, he made managed care an issue by advocating for private insurance companies to manage based on the theory that managed care would reduce costs, improve health outcomes, and address social determinants of health. Stitt tried to accomplish the transfer by executive action, but the Oklahoma Supreme Court ruled that he lacked authority without legislative authorization.
Managed care opponents said that OHCA managed SoonerCare with administrative costs of only 4%, while the managed care contracts allowed insurance companies up to 15% for administration and profit. Critics also said evidence of improved health outcomes is mixed, and the insurers were unlikely to address social determinants of health.
Oklahoma had a failed managed care system in the 1990s, and lawmakers strongly opposed shifting Medicaid to private management. However, after Stitt was re-elected in 2022, the Legislature authorized managed care, and OHCA signed contracts with insurance companies to administer SoonerSelect beginning April 1, 2024.
Medicaid will also remain a key issue because of President Trump’s One Big Beautiful Bill Act (OBBBA). OBBBA creates new administrative requirements and conditions on eligibility (including work requirements) primarily targeting the Medicaid Expansion population authorized in the Affordable Care Act. These changes and others are estimated to reduce federal Medicaid funding to states by $1 trillion over 10 years.
According to research by Healthy Minds, potential coverage losses under OBBBA are likely to stem from administrative hurdles, like missed renewal notices or incomplete forms, rather than a lack of eligibility. Healthy Minds found that even short gaps in coverage can have major health and financial consequences, especially for people with behavioral health conditions. When people lose access to care, their conditions can get worse and force them into more expensive treatment settings like emergency rooms.
To avoid added state costs if federal funding for the Medicaid expansion population declines, Gov. Stitt and legislative leaders proposed HB 4440 during the past session. The bill would have submitted a proposal to voters to remove Medicaid expansion from the constitution, where passage of State Question 802 placed it in 2020, and instead make it statutory law subject to legislative amendment. The bill failed to move forward, however, when the special election provision failed in the Senate.
The House also passed HJR 1067, which would submit to a vote to the people a constitutional amendment allowing the Legislature to not cover additional costs to the state if federal financial participation is less than 90% for Medicaid expansion. HJR 1067 passed the House but failed to continue after the House rejected Senate amendments to the bill.
Finally, Senate President Pro Tempore Lonnie Paxton filed a floor substitute for HJR 1077, originally a measure to amend the constitutional Tobacco Settlement Endowment Trust (TSET). The new bill would have submitted a proposal to voters to remove Medicaid expansion from the constitution and make it statutory if the federal match is reduced below 90%, as well as remove protections that currently prevent additional Medicaid eligibility restrictions from being imposed on Oklahoma’s expansion population.
The current governor and legislative leadership appear determined to address Medicaid funding by narrowing eligibility and potentially reducing health coverage rather than finding ways to preserve coverage for low-income individuals and families. Any action, however, will likely come after this November’s election. The OBBBA or the way it is implemented could change after the election. And there may be a governor less friendly to managed care. But one thing is certain. Medicaid will again be high on the list of issues for the next Legislature and governor.
