Questions remain regarding proposed Medicaid reform plan in Oklahoma despite widespread support (News OK)

By Jaclyn Cosgrove 

DURANT — Nico Gomez stood before a small group of 25 concerned residents. 

How will we save Oklahoma’s Medicaid program? 

That’s the question at hand. 

Gomez, Oklahoma Health Care Authority CEO, has his answer: the Medicaid Rebalancing Act of 2020.

Under Gomez’s proposal, 354,000 Oklahoma men, women and children would receive private health insurance over a four-year period.

“There’s a lot of moving parts, it’s complex, and that’s why I’m coming to every community that will have me and talk through this,” Gomez told the crowd at the April 22 meeting, “Because the other thing is, we can always make it better, there’s always an opportunity to make it better.”

So far, the proposed Medicaid Rebalancing Act has found a lot of support.

Republican leadership at the Capitol has voiced their support.

Hospital executives like the plan.

Addiction treatment leaders approve.

The Oklahoma Chapter of the American Academy of Pediatrics says the plan will help make Medicaid into a sustainable system.

The state medical association called it the “best proposal that has been put forth to stabilize the Medicaid system and protect health care for thousands of Oklahomans.”

But a lot of questions remain.

That’s why Gomez made an eight-city tour in April across Oklahoma, hosting public forums at local libraries, health facilities and college campuses. As of Thursday, audiences had ranged from 25 people in Durant to 121 in Tulsa.

In Durant, the crowd consisted of nursing home executives, public health workers, hospital leaders and office staff members from a range of Medicaid providers.

Seated in the middle of the room, Linda Dixon, billing supervisor at Tulsa-based Newborn Specialists of Tulsa, asked Gomez how to help get the word out to Oklahomans and legislators about the Medicaid Rebalancing Act.

Dixon said about 85 percent of the patients the newborn specialists’ office sees are covered through Medicaid. If providers see major rate cuts, Dixon said she worries about what will happen to their office and their patients.

“What do we need to tell (the Legislature) that we need and we want? We need a rate increase?” Dixon asked. “Because we cannot stay in business with a 12 percent cut.”

Gomez replied: “I think you have to tell them how important funding the system is to you and what happens if they don’t fund it.”

Cigarette tax

The Medicaid Rebalancing Act has three main parts.

The first step: Increase the cigarette tax by $1.50 per pack, raising $182 million to stabilize the Medicaid provider rates. This would require either a three-quarters vote from the Legislature, or if that isn’t possible, a referendum that would go to a vote of the people.

The health care authority has proposed cutting provider rates by 25 percent if the Legislature doesn’t appropriate the agency the dollars it needs to cover its costs.

If passed, it would be the single largest provider rate cut any state had ever made in the U.S. in the history of the Medicaid program, according to the authority. 

Gomez told the Durant crowd if the rate cut passed, scores of Medicaid providers would leave the program. Medicaid members would likely have a harder time finding quality, consistent care, and the Medicaid program would become unstable and unsustainable. 

Jahni Tapley, McCurtain Memorial Hospital CEO, stood at the meeting and explained to the crowd what a 25 percent provide rate cut would mean to a rural hospital like her facility. 

“In (McCurtain County), we’re the only labor and delivery within 60 miles, the only labor delivery within 100 miles in the state of Oklahoma,” Tapley said. “We deliver at least 300 babies a year, and if these cuts take effect, we will not be able to support an obstetrics department any longer.” 

Tapley is among several rural hospital leaders who have said they would have to stop offering birthing services if major provider rate cuts occur. Across Oklahoma, thousands of women already must drive more than an hour for access to a hospital with a maternity center, according to the American Congress of Obstetricians and Gynecologists.

This is one of the reasons that Gomez stresses the importance of stabilizing the Medicaid program through the $1.50 cigarette tax increase.

If the Legislature approved the cigarette tax increase, the tax could go into effect 90 days after Gov. Mary Fallin signed it. With a referendum, the authority would have to wait months longer for the money from the cigarette tax — if voters approved it in November.

“The most important thing we have to deal with right now is the budget because if we don’t deal with the budget,” Gomez told the audience at the Durant forum, “the rest of the plan that we’re here to talk about really falls apart, falls apart very quickly.”

Individual plans

The second piece of the plan involves using Insure Oklahoma, a state-based insurance program, to create an individual plan available to adults, aged 19 to 64, with incomes below 133 percent of the federal poverty level. To compare, an adult who makes $15,500 a year would be near 130 percent of the federal poverty level. 

This population of adults doesn’t qualify for subsidies, or tax credits, to pay for their coverage in the federal marketplace, Originally, under the Affordable Care Act, or Obamacare, they were supposed to receive coverage through Medicaid expansion.

But when the U.S. Supreme Court ruled that states had a choice on whether to expand Medicaid, that created a gap of people in non-expansion states like Oklahoma who couldn’t qualify for Medicaid and also couldn’t receive subsidized coverage in the exchange.

Under Gomez’s Medicaid Rebalancing Act, these adults would receive affordable coverage, including a “robust behavioral health and substance abuse component,” Gomez said.

“We want to make sure people have access to both physical and mental health needs through Insure Oklahoma,” Gomez said.

Oklahoma would use federal money to cover a majority of the cost for the new Insure Oklahoma plan — money it would have used for Medicaid expansion. For the state’s share of the cost, the authority has looked at using money from different fees that Medicaid providers pay, along with estimated cost savings from other parts of the rebalancing plan. 

A little more than 200,000 Oklahoma adults would qualify, and the authority estimates about 175,000 would sign up. 

Historically, Insure Oklahoma has provided a premium assistance program for employers and, for individuals who don’t have access through an employer, they’re provided limited coverage options, including paying a health insurance premium based on a sliding income scale.

The amount that these adults would have to pay would be based on a sliding scale, but no estimates are available yet about how much they would end up paying.

Private plans

Under the third part of the Medicaid Rebalancing Act, 175,000 pregnant mothers and children would be moved off Medicaid and onto private health insurance plans. 

The health care authority can’t make this move until after October 2019 when a federal mandate expires that blocks states from reducing eligibility for children’s coverage ends.

Under the rebalancing act proposal, pregnant mothers and their children who fall between 133 percent and 185 percent of the federal poverty level would be transitioned onto private health insurance.

Gomez said the state has looked at federal waivers that it could use to take tax credits that this group qualifies for and use that to buy health insurance on their behalf. 

Moving this group off Medicaid and the Children’s Health Insurance Program, available for children whose families make too much to qualify for Medicaid, would save the state an estimated $55 million, Gomez said.

Because conservative lawmakers have been clear they will not expand Medicaid, this piece of his plan was crucial, he said.

“If we’re going to grow Insure Oklahoma, I’ve got to shrink the Medicaid program so there’s no net growth in the program,” Gomez said. “Politically, there’s no political desire to expand Medicaid. So any solution that did that would be dead on arrival.”

Child advocates and policy wonks have expressed concerns about the impact this transition would have on low-income families. 

Joan Alker, executive director of the Georgetown University Center for Children and Families, said the coverage that children receive through Children’s Health Insurance Program (CHIP) is usually more affordable and comprehensive than what’s offered through private health insurance.

Also, families often don’t have to pay premiums for children covered through the program.

“So, right there, when you get into the tax credit world, you have premiums,” Alker said. “So that will be an increased cost for the family. You also have relatively high cost sharing and deductibles in the marketplace, and you have none of that in Medicaid, so the cost will increase for the families a lot, and for some of them, that’s even with the tax credits.”

Carly Putnam, a policy analyst at the Oklahoma Policy Institute, said it’s still unclear what the federal government will and won’t approve once the federal requirement regarding children’s coverage is no longer in effect — or if the federal government will extend that rule past 2019.

“This (plan) hinges on what happens with the CHIP maintenance effort expiring in 2019, and we don’t know what that’s going to look like, three years and another presidential administration down the road,” Putnam said.  

How to pay

The next step will be to see whether the cigarette tax passes through the Legislature in some capacity.

House Speaker Jeff Hickman said he was supportive of the ideas that Gomez has put forth.

Now the Legislature has to figure out how to pay for the plan.

“And I think there’s a lot of work being done on trying to identify either tax credits that may be able to be eliminated to bring some cost savings or revenue enhancements that may have to go to a vote of the people,” Hickman said. “The Democratic leaders have indicated to me that they’re not going to be supportive of any revenue enhancements.”

House Minority Leader Scott Inman, D-Del City, said Republican lawmakers long fought Medicaid expansion, but that is the plan that would best benefit Oklahoma, not the Medicaid Rebalancing Act.

“So now they’re admitting that they need to bring those dollars home,” Inman said. “… It’s going to take 175,000 pregnant women and children and push them off Medicaid, decreasing their options for their health care.”

While promoting the Medicaid Rebalancing Act, Gomez has said his plan isn’t perfect. 

In Durant, he pointed out it’s the only health care solution that has been put forth that has had any political viability, but he told the crowd — he’s open to other ideas.

Gomez told the crowd the most important thing is that low-income children and adults have access to the care they need. 

“While we’re going to be talking a lot about numbers, it really is about the individuals behind the numbers that are most important to us — our residents who rely on nursing homes or long-term care, our kids and pregnant moms, our individuals with disabilities, all very important, and making sure we have funding to support their health care needs, regardless of where they may live in Oklahoma,” Gomez said.

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