Oklahoma could fare better under Obamacare repeal, at least initially (News OK)

By Justin Wingerter

Few state coffers would fare better than Oklahoma’s under the latest Republican plan to repeal the Affordable Care Act, but medical groups fear “smoke and mirrors” cloud a looming threat to health care here.

Legislation introduced by U.S. Sens. Lindsey Graham, R-S.C., and Bill Cassidy, R-La., would partially replace the ACA, a 2010 health care overhaul known as Obamacare, by bundling much of its funding into large block grants and sending them to states with the requirement that money be used to help residents obtain health insurance.

“Whatever works best for our state, we could choose to be able to do that,” said U.S. Sen. James Lankford, R-Oklahoma City, who plans to vote for the bill next week. “Graham-Cassidy allows that and it not only allows it but it adds the federal dollars to the state to be able to actually accomplish that.”

States that expanded Medicaid under the ACA stand to lose federal dollars for health care while states that opted not to expand Medicaid, such as Oklahoma, would receive far more federal dollars than they otherwise would under the ACA.

“I support the Graham-Cassidy plan,” said U.S. Sen. Jim Inhofe, R-Tulsa, “because it restores authority to the states and puts health care decisions back where they belong — with patients and their doctors.”

Under current law, Oklahoma receives $610 annually for each of its 670,000 residents eligible for ACA subsidies, or $408.7 million per year. Under the Graham-Cassidy bill, Oklahoma would receive $886 million in 2021, $1.3 billion in 2022, $1.7 billion in 2023, $2.1 billion in 2024, $2.5 billion in 2025 and nearly $3 billion in 2026.

The $610-per-person grant Oklahoma currently receives would balloon to $4,417-per-person by 2026 under the Graham-Cassidy bill. Only two other states, Mississippi and Kansas, would see a larger increase.

“Based on our preliminary reviews, it appears Oklahoma would fare fairly well early on as the impacts would be more significant to Medicaid expansion states,” said Jo Stainsby, spokeswoman for the Oklahoma Health Care Authority, which overseas Medicaid in the state. “However, there is concern about the budgetary implications over time with the proposed adjustments downward in growth factors.”

Oklahoma Insurance Commissioner John Doak endorsed Graham-Cassidy weeks ago, while testifying before a U.S. Senate committee. Gov. Mary Fallin signed a letter last week with 14 other Republican governors in support of the legislation.

“Adequately funded, flexible block grants to the states are the last, best hope to finally repeal and replace Obamacare — a program which is collapsing before our very eyes,” the governors wrote.

‘Bad medicine’

Critics of the bill question whether those first two words — “adequately funded” — are fitting due to a provision in Graham-Cassidy that fundamentally changes Medicaid. Medicaid would cease being an open-ended program and become a program with caps on adult beneficiaries. Those caps are the equivalent of cuts, critics say.

“This is bad government and it is bad medicine,” said Dr. Kevin Taubman, president of the Oklahoma State Medical Association.

An analysis by the nonpartisan Kaiser Family Foundation found Oklahoma would gain about $2.24 billion from block grants between 2020 and 2026 but lose $947 million over the same span due to Medicaid changes.

“We hope and plead with our federal leaders from our state,” Taubman said. “They should utilize prudent thoughts that are less for their own personal political gain than for the hundreds of thousands of Oklahomans who will suffer because of this.”

Taubman, who made the “smoke and mirrors” remark, is concerned less with block grants than with other provisions of the bill. Though Medicaid spending increases annually under Graham-Cassidy, it will do so at a rate lower than the rising cost of medical care, he said. Oklahoma medical groups had similar concerns with ACA repeal bills that failed in the Senate earlier this year.

Lankford, who along with Inhofe has voted for every attempt at repealing the ACA in 2017, said the current growth rate should be sufficient.

“That only hurts us long-term if we’re not able to manage our dollars well,” he said. “The inflator in it, as far as the amount it goes up every year, is sufficient to be able to cover the costs for the growth of Medicaid over the years, unless our state does not manage the dollars well.”

Waivers and cliffs

Under a waiver system in the Graham-Cassidy bill, states could allow insurance companies to dramatically increase insurance rates for people with pre-existing conditions, a practice that was barred under the ACA, and offer plans that don’t cover essential benefits, such as maternity care, prescription drugs, mental health care, cancer screenings and hospitalization.

“That seeks to punish a huge segment of our state’s population,” Taubman said.

Carly Putnam, a policy analyst at the left-leaning Oklahoma Policy Institute, said the state would be under enormous pressure to grant waivers as a way to keep individual insurance plans affordable.

“But that means Oklahomans would be buying insurance that might not cover essential medical needs, and that people with serious health conditions who need comprehensive coverage would likely be priced out of the market,” she said.

The waivers also concern Craig Jones, president of the Oklahoma Hospital Association. Jones said the OHA, which opposed previous Obamacare repeal efforts, is still analyzing the bill to understand its ramifications.

“It does reduce the amount of lives that currently are covered by the Affordable Care Act,” he said. “Being a non-Medicaid-expansion state, the loss of covered lives is not as great but clearly we’re interested in seeing an increase in covered lives.”

Under the Graham-Cassidy bill, block grants would end after 2026, creating a cliff for the nation’s health care system if Congress did not reauthorize the grants before then. Oklahoma would lose $2 billion in 2027 if Congress did not reauthorize, according to the Kaiser Family Foundation analysis.

Cassidy has said he is confident Congress will reauthorize, comparing it to the Children’s Health Insurance Program. Health care analysts, however, fear the cliff could destabilize a national health care market already weakened by elimination of the individual and employer mandates, requirements that people and employers buy coverage.

“Even before the block grant is dissolved,” Putnam said, “we’d expect to see massive disruption to our federal marketplace because insurers would have no real incentive to stick around in the face of escalating costs, no individual mandate, and a set expiration date.”

A one-year freeze on Medicaid reimbursements to Planned Parenthood for non-abortion services, a longtime goal of conservatives, would be accomplished under the Graham-Cassidy bill. Planned Parenthood critics say the money could better be spent at women’s health clinics that don’t offer abortion.

Planned Parenthood Great Plains CEO Aaron Samulek said the bill would limit low-income Oklahomans’ access to health care.

“PPGP and its supporters fought back the first round of attacks under Trumpcare and we are equipped and ready to fight for access to health care once again,” he said, referring to prior ACA repeal bills. “We won’t stop until extreme politicians come to their senses about what’s right for the Americans they represent.”

What’s next

The Senate is on a tight deadline to pass Graham-Cassidy before Sept. 30, the last date it can use a procedural tactic known as reconciliation and avoid a Democratic filibuster. Republicans will need to convince 50 of their 52 senators to vote in favor, along with a majority in the House.

If the bill becomes law, the Oklahoma Health Care Authority will find itself with considerably more funds than it’s accustomed to and many options for how to spend them. What it would do is unclear.

“We really don’t have a precedent for states receiving large block grants like this for health care,” said Marianne Udow-Phillips, executive director of the nonpartisan Center for Healthcare Research and Transformation.

The OHCA could, for example, create high-risk pools to subsidize the insurance of Oklahomans with terminal illnesses. Or it could subsidize insurers to keep them in the marketplace and stabilize premiums. Or it could pay doctors and hospitals for uncompensated care. It could do all of those or none of them.

“Regardless of what is passed at the federal level, our agency will work with state leadership to provide the best program possible for Oklahomans with the funding we are provided,” said Stainsby, the OHCA spokeswoman.

Lankford said the OHCA has told him repeatedly that greater flexibility will allow the state to care for more residents.

“We have federal bureaucracy, we have state bureaucracy, then you have hospital bureaucracy and then you get the patient, for every dollar that we spend. If we could cut out one of those bureaucracies, we could get more dollars to the patient,” the senator said.

Jonathan Small, a former director of government affairs at the Oklahoma Insurance Department, said elimination of the ACA is crucial, regardless of what replaces it.

“Whether it’s a complete outright repeal or a partial unwinding of the Affordable Care Act, that’s a good thing for Oklahomans,” said Small, president of the conservative Oklahoma Council of Public Affairs.




Margaret (Maggie) den Harder obtained a Bachelor of Arts in Christian Theology from Seattle Pacific University and a Master of Public Administration from the University of Oklahoma. Originally from the Pacific Northwest area of Washington state, Maggie has called Tulsa home for the past 8 years. Since living in Tulsa, Maggie has worked in the legal field, higher education administration, and the nonprofit sector as well as actively volunteering in the community. Maggie also recently spent time at the City of Tulsa as a consultant and wrote the content for Resilient Tulsa, an action-oriented strategy designed to better equity in Tulsa. Through her work, community involvement, and personal experiences, Maggie is interested in the intersection of the law and mental health and addiction treatment issues, preventative and diversion programs, and maternal mental health, particularly post-partum depression and post-partum psychosis. While working at Oklahoma Policy Institute as a research intern, Maggie further developed an interest in family dynamics and stability, economic security-related stress, and intergenerational trauma.

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