Medicaid Costs in Oklahoma Rise – Oklahoma Council of Public Affairs
Due to the passage of State Question 802, Oklahoma’s Medicaid program was expanded beginning last July to include many able-bodied adults. The expansion, which was authorized by the federal Affordable Care Act (better known as “Obamacare”), was touted as a way to expand health services with little real cost to governments states, as a high rate of federal matching funds was provided.
But during a presentation of the Oklahoma Health Care Authority (OHCA) budget to state lawmakers this week, OHCA officials listed “sustainable funding for population expansion” as the one of the main challenges facing the agency.
“We still need to work on a sustainable funding mechanism for the expansion,” Oklahoma Health Care Authority CEO Kevin Corbett told members of the House Appropriations and Budget Committee.
Last year, lawmakers had to provide an additional $164 million in state appropriations just for the Medicaid expansion population. That money came primarily from an increase in Hospital Supplementary Compensatory Payment Program (SHOPP) fees assessed on certain hospitals’ revenues.
However, hospital officials have since announced that they no longer want to pay SHOPP’s fees, even though hospital officials had previously approved both the creation of SHOPP and the expansion of Medicaid. Hospital officials instead urged lawmakers to divert other tax revenue from other uses.
In the first six months, officials added about 200,000 people to Medicaid following the expansion, though Corbett said only 160,000 represent genuine new enrollees since the rest were previously covered by other programs. governmental.
The additional costs created by the expansion come amid a dramatic increase in the overall cost of Oklahoma’s Medicaid program.
“You can see that we’ve had growth when it comes to this program,” Corbett said. “If you just look at where we were in 2017 and where we are in FY22, it goes from a $5.5 billion budget or organization to an $8 billion budget, or an increase of almost 46.47%, largely due to registrations. increases as well as the cost or use of the services.
Most of the cost increase has been borne by the federal government due to increased federal matching rates in recent years, he said, but that is changing this year as the federal matching rate traditional Medicaid program is cut by the federal government.
“It’s not fixed funding as far as our federal partners are concerned,” Corbett said. “It changes every year.”
To offset the reduction in federal matching funds, an additional $24.4 million in state appropriations will be needed in the next state budget year, according to OHCA officials.
In addition, officials project that the cost of services for people enrolled in the traditional Medicaid program will increase by 2.6% next year, while the cost of services for people enrolled in Medicaid through the Obamacare expansion will increase by 2.6%. 6% next year. As a result, OHCA officials are asking for an additional $52.3 million to maintain the existing program, as well as the $24.4 million to offset lower federal payments.
This increased government spending may be just a glimpse of more to come.
OHCA’s budget presentation showed that the cost per person of Medicaid enrollees has steadily increased from $4,831 per person per year in the 2020 budget year to $5,385 per person in next year’s state budget, an increase of more than 11 percent in just three years.
And, while Medicaid expansion was touted by proponents as a way to save rural hospitals, OHCA budget documents show that the vast majority of expansion funds are likely going to urban facilities. OHCA figures show that 61% of expansion enrollees live in urban areas.