Medicaid 101: The SoonerCare Safety Net

Our health care system is experiencing an unprecedented period of upheaval. Decades of rising costs, an ever-increasing share of citizens without insurance, and an aging baby boom generation are putting immense pressure on payers, providers, and patients alike.  A new policy brief from Oklahoma Policy Institute underscores the importance of SoonerCare/Medicaid as the primary safety net health care program for low-income Oklahomans who would otherwise go uninsured, primarily children, the elderly, and persons with disabilities.  The five-page brief, Medicaid 101: The SoonerCare Safety Net, outlines the program and its eligibility requirements, breaks down its funding sources, and debunks common Medicaid myths.

One popular myth is that Medicaid costs are rising exponentially and the program is riddled with waste.  In fact, scholarly research has demonstrated that Medicaid costs about 20 percent less on average per person than private insurance, so the program is quite lean.  While it is true that health care costs are rising, it’s important to remember that they are rising across the board, not just for the Medicaid program.  The state can also take advantage of a favorable federal matching rate to leverage their health care investment.  For every $1.00 the state government invests in SoonerCare in FY 2012, the federal government will contribute $1.77.

Another common myth is that Medicaid is free healthcare for people who don’t work.  Actually, most working-age adults in Oklahoma are not eligible for comprehensive SoonerCare coverage.  Only 9.6 percent of SoonerCare/Medicaid recipients in the state are healthy working-age adults (not counting those receiving only family planning services). That’s because eligibility for an adult who is neither elderly, disabled, or chronically ill is restricted to parents at or below 37 percent of the federal poverty level.  That’s just shy of $7,000 a year for a family of three.  The vast majority of Oklahomans on SoonerCare, about 70 percent, are kids and seniors.

SoonerCare/Medicaid is also instrumental in caring for chronically ill uninsured Oklahomans.  In 2011, the program provided care to 8,430 cancer patients and treated 81,920 with heart disease or stroke.  It also plays a central role in supporting the state’s aging and institutionalized population by helping cover the costs of nursing home care:

With nursing home or institutional care coverage largely unavailable through Medicare or traditional private health insurance plans, Medicaid is the nation’s de facto financing system. SoonerCare OLL (Opportunities for Living Life) funds nearly 70 percent of all long-term care (both nursing facilities and intermediate care facilities for the mentally retarded). SoonerCare provides coverage for low-income people and many middle-income individuals who have become nearly impoverished by “spending down” their assets to cover the high costs of their long-term care.

The new federal health care law will soon usher in significant changes to Medicaid, sparking a welcome and ongoing dialogue about the cost and value of the program. Pivotal in these discussions is an understanding of SoonerCare’s safety net function – without which thousands of Oklahoma families would forgo basic health services for their children, lack necessary medical care for their disabled loved ones, and be left to shoulder alone the unsustainable burden of the long-term care of their parents and grandparents.

Click here to download ‘Medicaid 101: The SoonerCare Safety Net’