In a recent blog post, we took issue with claims about state spending made by the Oklahoma Council of Public Affairs. The post pointed out that OCPA left out important facts – namely that nominal spending numbers are meaningless without considering inflation and the number of people in the state. OCPA wants us to believe that Oklahoma’s government is growing out of control and tax collections are at record highs, but considering all of the facts shows that our state government has actually shrunk for the past two years, with education especially hard hit. And far from being at record highs, state tax collections remain below every year from 2006 to 2009 after accounting for inflation.
OCPA has not answered any of these critiques, but they did respond on one point. In that same post, we wrote that state spending on Medicaid decreased from 2011 to 2012. OCPA argued that if you don’t count state appropriations derived from stimulus funds as part of state spending in 2011, then the 2012 number is an increase.
While we can debate over whether state-appropriated stimulus funds were “real” state spending, they were treated as such by the Legislature, which allocated them in the General Appropriations bills for 2010 and 2011. Appropriations figures put out by the Office of Management and Enterprise Services and the Oklahoma Health Care Authority included stimulus funds as part of state spending for those years. We followed in that line in our analysis.
In any case, it’s irrelevant to the opportunity we have now. The stimulus was temporary by design, meant to support states through the worst of the recession. The Medicaid expansion is a long-term commitment by the federal government to ensure that health care is accessible to the working poor. We can extend Medicaid with 100 percent federal funds through 2016, phasing down to 90 percent federal funds by 2020. Over the next decade, that would mean more than $12 coming into the state for every $1 dollar in new state spending. A Kaiser Commission report (which Governor Fallin cited in her State of the State address) finds that accepting federal funds would extend health coverage to 126,000 Oklahomans while increasing state spending on Medicaid by just 2.7 percent.
There’s no denying the math – this is a very good deal for states. That’s why a majority of states have announced they will accept or are leaning towards accepting the federal dollars. Republican governors have come out in support in eight states: Arizona, Florida, New Jersey, Michigan, Nevada, New Mexico, North Dakota, and Ohio.
Certainly health care costs have been rising, both in the public and private sector. But the truth is that Medicaid costs have risen more slowly than private insurance. The Kaiser Commission has found that between 2000 and 2009, Medicaid costs per patient rose by an average of 4.6 percent a year, compared to a 7.7 percent increase in premiums for employer-sponsored insurance. Medicaid administrative costs are less than half of the typical costs for private sector insurers.
The continuing rise in health care costs will be a challenge for Oklahoma and the U.S., but scapegoating Medicaid is not the answer.