Oklahoma Medicaid

Cigarette tax legislation didn't specifically call for Medicaid expansion - House Dems rejected it

Where in your state to call or visit for Medicaid.How to apply

Online at HealthCare.gov or the SoonerCare Medicaid website.  Or by phone at 1-800-318-2596.  You can also get in-person help at an Oklahoma DHS Human Services Center or contact the SoonerCare Helpline at 1-800-987-7767

Who is eligible in your state to get Medicaid?Who is eligible

The aged, blind, and disabled.  Also, parents with income up to 42% of poverty, pregnant women with income up to 138% of poverty level, and children under age 19 with income up to 205% of poverty. Insure Oklahoma helps cover the cost of private insurance for adults with income below poverty level.

  • By
  • healthinsurance.org contributor
  • October 1, 2016

As of September 2016, there were 801,955 Oklahoma residents enrolled in SoonerCare, the state’s Medicaid program. Two-thirds of them were children. For perspective, SoonerCare enrollment stood at 790,051 at the end of 2013. Enrollment has only grown 1.5 percent since ACA implementation began — as opposed to a national average of 27 percent — because Oklahoma has not accepted federal funding to expand Medicaid under the ACA.

Still no Medicaid expansion in Oklahoma

In May 2016, there was a flurry of news articles indicating that Oklahoma might be on the brink of agreeing to Medicaid expansion. But the legislation in question – HB3210 – did not pass, and wouldn’t necessarily have expanded Medicaid, even if it had passed.

Oklahoma was facing a significant budget shortfall and the possibility of having to cut Medicaid provider reimbursement rates by 25 percent. Ultimately, lawmakers passed a budget that did not call for a reduction in Medicaid reimbursements, but they also did not move forward with Medicaid expansion.

Prior to the passage of the budget, in an effort to shore up the financial situation, four Republican lawmakers introduced HB3210 in May 2016. The legislation called for an additional cigarette tax of $1.50 per pack (on top of the $1.03 per pack tax that already exists in Oklahoma).

The money collected by the cigarette tax would then be deposited into the state’s “Healthcare Revolving Fund” and could be used by state agencies that receive federal matching funds under the Social Security Act (eg, Medicaid). HB3210 was supported by Oklahoma Governor Mary Fallin.

The measure passed out of committee on May 17, but failed in a vote on the House floor on May 18. The final vote was 59 to 40, and the measure needed at least 76 Representatives in favor in order to pass. All of the yes votes came from Republicans, while the no votes included both Republicans and Democrats.

The deal-breaker for Democrats was that the measure did not specifically require the state to expand Medicaid. It would have essentially been a very regressive tax (tobacco use is much more common among lower-income residents), and the money in the Healthcare Revolving Fund would have been apportioned by lawmakers to agencies that get federal matching Medicaid funds – but there was no accompanying requirement that the state expand its eligibility guidelines for Medicaid.

Democrats in Oklahoma’s legislature have been pushing for Medicaid expansion ever since the Supreme Court ruled in 2012 that expansion would be optional for states. They plan to continue the push during the 2017 legislative session.

Failed attempt to cut Medicaid eligibility for parents

Oklahoma has not expanded Medicaid under the ACA. But it attempted to go one step further than that, and tighten already-stringent eligibility rules even more.

Amid a budget shortfall of $1.3 billion, lawmakers in the Oklahoma House of Representatives passed HB2665 in March 2016. HB2665 called for eliminating Medicaid eligibility for non-pregnant, able-bodied adults under age 65. All 30 Democrats in the Oklahoma House opposed the bill, and were joined by four Republicans.

But the Senate did not pass HB2665, so Medicaid eligibility for parents in Oklahoma remains unchanged.

As background, the only non-pregnant, able-bodied adults under age 65 who currently qualify for Medicaid are those with household incomes up to 42 percent of the poverty level, and who also have dependent children. For a household of two (one adult and one child), that’s an annual income of about $6,700.

Most able-bodied adults with dependent children aren’t able to qualify for Medicaid in Oklahoma because their incomes aren’t low enough. And able-bodied adults without dependent children aren’t eligible for Medicaid at all in Oklahoma, regardless of their income, because the state has not accepted federal funding to expand Medicaid.

If HB2665 had been passed by the Senate and signed into law, it would have cut about 111,000 people from SoonerCare (Oklahoma Medicaid), effective November 2016. The measure was expected to save the state about $130 million a year, but the state would have also missed out on $203 million a year in matching funds if they had eliminated the state funding.

The federal government would have had to approve a waiver in order for Oklahoma to be able to cut Medicaid eligibility for low-income, able-bodied parents. Representative Doug Cox (R-Grove) authored HB2665. He has also said that he’s “working with some folks to design something” in terms of legislation to expand Medicaid in Oklahoma under the ACA.

Other Medicaid legislation

As part of a demonstration waiver, up to 3,000 full-time college students aged 19 – 22 in Oklahoma can be covered under Medicaid if their incomes don’t exceed 200 percent of the poverty level.

SB1548 was introduced in February 2016, and would have increased the age limit for the demonstration waiver to 26, would have removed the requirement that the student be in school full-time, and would have expanded the term “college” to include trade and technical schools. But SB1548 did not advance out of committee.

SB1372 was introduced in February 2016, and calls for the state to expand Medicaid under the ACA. This bill also did not advance out of committee.

Oklahoma considers privatizing Medicaid

In 1995, Oklahoma contracted with private insurers in a capitated managed care program to serve Medicaid enrollees in the Tulsa, Oklahoma City, and Lawton areas. But by 2004, the state had pulled the plug on the managed care system after too many providers dropped out.

In 2015, in an effort to reign in Medicaid spending growth, lawmakers in Oklahoma began considering the possibility of reviving the managed care model for the state’s Medicaid enrollees. Some advocates for Medicaid patients were opposed to the possibility, noting that it would result in disabled, blind, and elderly residents needing to switch to new doctors and new treatment plans. But supporters of the privatization note that there have been many advances in Medicaid managed care programs in the last two decades.

In May 2015, lawmakers in Oklahoma passed HB1566, which directs the state to implement a pilot program to evaluate the managed care model for Medicaid enrollees, and gather proposals from private insurers. 23 “outside parties,” including Blue Cross Blue Shield of Oklahoma, provided proposals to the state. Blue Cross Blue Shield indicated that their recommendations could cut total Medicaid spending in Oklahoma (including federal and state spending) by up to $450 million over five years.

As of March 2016, according to Kaiser Family Foundation data, Oklahoma was one of only 12 states that didn’t have any managed care organizations contracted with their Medicaid program.

The state is also considering other possibilities for cost-containment, including the aforementioned eligibility cuts, so a switch to managed care organizations isn’t yet a foregone conclusion. Lawmakers introduced three bills (SB1500, SJR56, and HB2308) in the 2016 session that would delay or cancel the implementation of Medicaid managed care in Oklahoma, but all three died in committee.

Oklahoma Medicaid and the ACA

Because Oklahoma has not accepted federal funding to expand its Medicaid program, eligibility rules in the state are unchanged from 2013. The ACA’s premium subsidies for private plans are only available for people with household incomes between 100 percent and 400 percent of poverty level, so there is no assistance for people living below the poverty line in states that have not expanded Medicaid.

In Oklahoma, that’s estimated to be 91,000 people, most of whom have no access to Medicaid, and also have no realistic access to private insurance, since they would have to pay the entire premium themselves, with no subsidy to lower the cost (some are covered by Insure Oklahoma – see details below).

As the ACA was written, it called for Medicaid expansion for all legal residents with household incomes up to 138 percent of poverty, with the federal government always paying at least 90 percent of the cost of covering the newly eligible Medicaid population.

But in 2012, the Supreme Court ruled that states could not be penalized for opting out of Medicaid expansion, and as of the fall of 2016, 19 states — including Oklahoma — have not yet expanded their Medicaid programs.

If Oklahoma were to expand its Medicaid program, it’s estimated that 225,000 residents would be newly eligible for Medicaid coverage in the state (other sources put the number much lower – around 127,000 people).  By not expanding Medicaid, Oklahoma is missing out on $8.6 billion in federal funding over the next ten years. And Oklahoma residents are paying federal tax dollars that are being used to pay for Medicaid expansion in other states.

Oklahoma commissioned the Leavitt Report, which found that expansion of Medicaid would directly cost the state $850 million over the next decade, but would ultimately result in a net savings of $464 million for Oklahoma over the same time period, when other factors were taken into consideration. Despite that finding, the state legislature has not been receptive to expansion of Medicaid. Lawmakers and the Governor have concerns over the amount that the state is currently spending to provide care for more than 820,000 people currently enrolled in Medicaid, and they’ve expressed concerns about the sustainability of adding more than 100,000 additional people to the state’s Medicaid program.

Who is eligible?

Although the state’s SoonerCare Medicaid coverage is available for Oklahoma children with household incomes as high as 205 percent of poverty, parents with dependent children are only eligible for Medicaid if their annual household income is under 42 percent of poverty (just over $10,000 for a family of four), and most childless adults are ineligible regardless of income. Insure Oklahoma helps to provide coverage for low-income adults, and is discussed below.

In general, SoonerCare Medicaid is available for some low-income parents with children under the age of 18, pregnant women with household incomes up to 138 percent of poverty level, children under age 19 with household incomes up to 205 percent of poverty, and people who are aged, blind, or disabled.

How do I apply?

You can apply at HealthCare.gov or by phone at 1-800-318-2596.  Medicaid enrollment is available year-round.

For children, pregnant women, and low-income parents, applications can also be completed online through the SoonerCare Medicaid website, or you may get in-person help at an Oklahoma DHS Human Services Center.

Assistance is also available by phone.  The SoonerCare Helpline can be reached at 1-800-987-7767

For applicants who are aged, blind, or disabled, enrollment can be completed at an Oklahoma DHS Human Services Center.

Other low-income health programs in Oklahoma

In addition to SoonerCare Medicaid, the state also operates SoonerPlan, which is a state-funded program to provide family planning services to men and women with incomes that do not exceed 133 percent of poverty level, and who are not enrolled in SoonerCare Medicaid.

Another state-run program, Insure Oklahoma, predates the ACA by several years and subsidizes private health insurance for residents with incomes up to 100 percent of poverty level. Prior to 2014, the upper income limit for Insure Oklahoma was 200 percent of poverty level, but the limit was lowered in January 2014 because enrollees with incomes above 100 percent of poverty are now eligible to receive federal tax credits to offset the cost of private plans purchased through the exchange.

Insure Oklahoma offers assistance to people who obtain employer-sponsored insurance from one of the 4,280 employers who are enrolled in the Insure Oklahoma program (with a 60/25/15, state/employer/employee split on the premiums), and it also offers a program that allows individuals to purchase coverage on their own.

As of May 2014, there were 13,854 enrollees in the employer-sponsored insurance program, and 4,929 in the individual insurance program. Total enrollment had dropped to 17,923 in mid-2015. This was down from a total of about 30,000 enrollees in 2013. But by September 2016, enrollment had climbed to 19,102, with 14,616 enrollees in Insure Oklahoma’s employer-sponsored insurance program, and 4,486 in the individual insurance program.

But although Insure Oklahoma has continued to provide coverage for thousands of residents, the total number of enrollees amounts to only a very small fraction of the 91,000 Oklahoma residents with incomes below poverty level who are ineligible for Medicaid or subsidized coverage in the exchange. Because the state has not expanded Medicaid, most of these people are currently in the coverage gap and don’t have insurance at all.

Funding for Insure Oklahoma comes from tobacco taxes and matching federal funds that were scheduled to cease at the end of 2013 and be replaced with Medicaid expansion funding. But because Oklahoma did not accept Medicaid expansion, the state instead negotiated with the federal government to get a one year extension for Insure Oklahoma. The state got a second extension in June 2014 that allowed Insure Oklahoma to continue to operate throughout 2015, and a third extension in June 2015 provided continued federal funding through the end of 2016. In March 2016, Oklahoma submitted another waiver that would extend the Insure Oklahoma program through 2018, but as of October 1, 2016, approval from CMS was still pending.

Enrollment growth

Despite the fact that Oklahoma has rejected Medicaid expansion, enrollment in the state’s CHIP and Medicaid programs grew slightly from 2013 to the first half of 2015. Total enrollment was up 4 percent, from 790,051 in late 2013, to 821,867 in July 2015. But by December 2015, enrollment had dropped to one percent less than the 2013 level, to 781,927.

Budget woes

Although Oklahoma has not changed its eligibility guidelines, several thousand new enrollees since 2013 (sometimes called “woodworkers” because the general open enrollment periods have brought people “out of the woodwork”) have placed an additional strain on the state’s Medicaid budget.

Because of the pressures on the Medicaid budget, Oklahoma announced in July 2014 that the state would be implementing a 7.75 percent cut in Medicaid provider reimbursement rates. This was expected to net $48 million savings, but in October 2014 the Governor released a statement saying that the state needed to come up with $164 million in additional funding in order to maintain Medicaid coverage at the current levels for the state’s 818,000 Medicaid beneficiaries. The budget shortfall was part of the impetus for the state to consider the possibility of switching to managed care organizations for the Medicaid program.

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