Math has a well known liberal bias.
HB3210, raising cigarette tax by $1.50, passes 16-11 in joint committee on appropriations & budget. Heads to the #okleg House floor
— Trevor Brown (@tbrownOKC) May 16, 2016
That is the Oklahoma House passing a Medicaid expansion bill.
The state is heavily dependent on cyclical resource extraction taxes (oil and gas) for a significant chunk of their state budget. The state is facing a a massive deficit and Expansion is a good way to solve a decent chunk of the problem while not destroying the public health system:
a huge $1.3 billion hole in the budget that threatens to do widespread damage to the state’s health care system.
So, in what would be the grandest about-face among rightward leaning states, Oklahoma is now moving toward a plan to expand its Medicaid program to bring in billions of federal dollars from Obama’s new health care system.
What’s more, GOP leaders are considering a tax hike to cover the state’s share of the costs.
“We’re to the point where the provider rates are going to be cut so much that providers won’t be able to survive, particularly the nursing homes,” said Republican state Rep. Doug Cox, referring to possible cuts in state funds for indigent care that could cause some hospitals and nursing homes to close.
The law still needs to go through the Senate and get signed by the Republican governor. After that the state will need to negotiate with the Center for Medicare and Medicaid Services for a waiver as Oklahoma wants to adapt the Arkansas model. Arkansas buys private exchange plans and then tops up their cost sharing assistance for people to minimize the deductible.
From a cash flow perspective this is interesting. Private exchange plans tend to pay providers significantly higher rates than Medicaid. It allows Oklahoma to send their rural providers a decent income stream that should allow the state to hold steady or even decrease their Legacy Medicaid provider rates. That is one source of state cash savings. The other is it moves a lot of people from Legacy Medicaid with a high state share to Expansion Medicaid with a low state share of the costs.
Over the long run, state budget math has an expansionary bias. Expansion solves several big problems without allowing too many hard choices to be made (as well as make the residents of the state better off). It is a one way ratchet. This is why national Democrats have been proposing to give every state three years of 100% funding, and I wish that they would propose bumping up Legacy Medicaid federal shares by several points contingent on expansion being in place. Those policies are big bribes to get the hold-out states on board because sooner or later every state budget will need some relief. Federal Medicaid money is relief.