Oklahoma thinks the unthinkable with health care cuts

Should Oklahoma strip Medicaid health care coverage from people least able to afford insurance on their own? In a state that trails most of the nation in uninsured rates and health outcomes, who could defend this?

Should the Department of Mental Health and Substance Abuse Services no longer cover mental health services provided to children with mental illness by therapists in individual practice?  When less than 40 percent of children with a major depressive episode received treatment in the past year, how could such a move even be on the table?

Yet these are two of the many bad ideas now being considered by legislators and agency heads. After years of damaging budget cuts and huge shortfalls that are forcing state agencies to reduce vital services even more, the once-unthinkable is being thought.

HB 2665, introduced by Dr. Doug Cox, would eliminate Medicaid coverage for any non-disabled adult under 65. Oklahoma eligibility standards for working-age adults are already among the nation’s most restrictive, covering only parents of dependent children with annual incomes below about $8,000. Non-disabled adults without dependent children cannot be covered.

Oklahoma has already cut the Medicaid program by close to $450 million since 2010. Reimbursement rates to providers have been slashed from 100 percent of Medicare levels down to 86 percent. Many health benefits have been reduced or eliminated, including perinatal dental services and orthodontic services,  and co-payments have been raised. To this shameful situation, HB 2665 would add some 110,000 of the state’s poorest adults to the already swollen ranks of the uninsured. Hospitals and other safety net providers would face even higher costs for uncompensated care.

In committee last week, Dr. Cox said he introduced his bill “with a heavy heart”, but warned, “If we don’t have a revenue stream, we’re going to have to make cuts like these.” In his view, HB 2665 may represent the least-bad option, in that it would affect a population that could work.  As we’ve previously noted, however, this ignores that many or most of these low-income adults can’t find full-time work, may be struggling with mental illness or chronic health conditions, may be excluded from work by a criminal record, or may need to be caregivers for children or parents.

While HB 2665 passed out of committee, ultimately it may not be a genuine threat. Federal law requires states participating in Medicaid to cover the parents of dependent children up to a certain income level. This bill directly violates this federal requirement. Dr. Cox is aware that his bill asks the Oklahoma Health Care Authority to apply for a federal waiver that would almost certainly be denied.

Meanwhile, the Department of Mental Health and Substance Abuse Services (DMHSAS) proposed a rule to no longer pay for mental health services provided by individual therapists to children enrolled in Medicaid. Instead, only services provided by agencies, such as community mental health centers, would be covered. About 8,000 children statewide receive Medicaid services from independent master’s-level therapists, according to the Tulsa World.

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The tragedy here is that Oklahoma’s stubborn refusal to accept federal funds to expand coverage to all working age adults below the poverty level makes things worse than they need to be.

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The Department proposed the rule as part of efforts to implement $9.8 million in cuts resulting from the state’s initial 3 percent mid-year revenue failure. Forced to make difficult cuts, the Department justified its proposal based on data showing that children with the most severe mental health issues are already being served by state agencies and argued that no children would be denied services. But following a strong public outcry, Governor Fallin rejected the proposed rule, stating that it would not create any savings and would risk impeding access to services and disrupt care for children, especially for traumatized foster children. The Governor stated:

I understand that budgetary constraints will force us to make difficult choices in the days and months ahead, and that these choices will likely result in less services for vulnerable populations.

DMHSAS had counted on the proposed rule to save $1.2 million this year. It will now have to find other ways to fill that hole, which will get larger once the state’s second round of mid-year across-the-board cuts are announced in March.

The tragedy here is that Oklahoma’s stubborn refusal to accept federal funds to expand coverage to all working age adults below the poverty level makes things worse than they need to be. Saying yes to federal funds could save the state $450 million over a decade by freeing up state dollars that are currently being spent by the Health Care Authority, Mental Health Department, and other state agencies on services for populations that could be funded with no less than a 90 percent federal match.  Just maybe, the outcry over harmful proposals to cut thousands of parents out of Medicaid and disrupt childrens’ mental health care will move state leaders to reconsider their self-defeating opposition to federal funds.