Mental health services could be impacted by Medicaid expansion alternative, leadership change (Capitol Update)

In the run-up to the Legislative session beginning this week, two things happened that could affect mental health services for thousands of Oklahomans. First, Terri White, the Commissioner of Mental Health and Substance Abuse Services, resigned her position. Acknowledged by nearly everyone as a knowledgeable and enthusiastic advocate for mental health services in Oklahoma, she seemed to have been on a lifeline for the past year since Gov. Stitt took office. Terri didn’t say why she resigned, but one can assume she will continue her advocacy for availability of mental health and substance abuse services.

The other major event of the week was the governor’s announcement that he intends to make Oklahoma among the first states to request a Medicaid waiver under the Trump administration’s new “Healthy Adult Opportunity” (HAO) program, which would dramatically alter the way the federal government returns Medicaid tax dollars to states. Under HAO, states will apply for a block grant and be required to operate their Medicaid program within a defined budget target set on either a total expenses or per-enrollee basis. Currently states provide certain mandatory Medicaid services, then such additional allowable services as they are willing to pay for, and the government provides a federal match as the services are needed without an overall limit.

Cutting the cost of funding health care is the purpose of artificially capping in advance how much money will be spent for health care. Proponents argue it is necessary because, at some point, the money will run out. But there is an easy answer for that in Oklahoma. Because of budget cuts, we have seen for the past decade what happens when we run out of money. There are two options: Cut provider rates or cut benefits. In Oklahoma, we did both, and it was painful. But it was done in a responsible way and only as necessary. Why put our Medicaid budget in a straitjacket from the beginning to meet an artificial target that may not meet people’s needs?

Some proponents also say that if a state does not use all its block grant for the promised services, it can use the “savings” on some other type of health care service. That has a certain ring of gamesmanship to it. How often is the federal government going to give a state more than it needs, then allow it to find “savings” to spend elsewhere? While the governor may believe the HAO proposal is something new, block grants for Medicaid have been discussed going all the way back to the Nixon administration and have been rejected.

Another feature of HAO is that the federal government “encourages states to implement evidence-based payment and delivery system reforms in order to achieve compliance with the quality and cost goals.” Many read this as encouraging adoption of a managed care delivery system that is usually administered by a private, for-profit company. In his announcement, Gov. Stitt endorsed managed care as part of his proposal. Legislators have been arguing the pros and cons of managed care for years, and so far they have declined to adopt it.

One of the biggest winners under Medicaid expansion is mental health and substance abuse services. Without Medicaid expansion, these services are available to very few people over age 18. And only mental health services through Medicaid are available to children. Oklahomans have suffered and some have died from addiction and mental illness for a decade without the help that could have been available through Medicaid expansion. It seems ironic that a couple of days before the governor announced his new Medicaid proposal, one of the state’s leading advocates for mental health and substance abuse services announced her resignation as Commissioner of Mental Health.


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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