Oklahoma and the ACA’s Medicaid expansion

Oklahoma hasn't expanded Medicaid, but plans to seek federal approval for a Medicaid work requirement

oklahoma Medicaid guide

Medicaid enrollment in Oklahoma

As of October 2018, there were 796,455 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. Net enrollment has grown by less than 1 percent since the Affordable Care Act (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.

Estimates vary in terms of how many people would gain eligibility for Medicaid if the state were to accept federal funding toe expand the program. The Robert Wood Johnson Foundation estimates it would be at least 160,000 people. A study commissioned by the Oklahoma Health Care Authority (the agency that oversees Medicaid in the state) estimated that there would likely be more than 200,000 newly-eligible residents; The Center on Budget and Policy Priorities estimates 225,000. And the Oklahoma Hospital Association (which notes that rural hospital closures are due in part to the state’s failure to accept federal funding to expand Medicaid) estimates that 272,000 people would gain access to Medicaid in the first full year of expansion.

Oklahoma’s proposed Medicaid work requirement

Even though Oklahoma has not expanded Medicaid, the state is planning to seek federal permission to impose a work requirement on its Medicaid population, based on the executive order signed by Governor Fallin in March 2018, and HB2932, enacted in May 2018, both of which directed the Oklahoma Health Care Authority to seek federal permission to implement a Medicaid work requirement.

Throughout the summer of 2018, the Oklahoma Health Care Authority received 1,000 comments from the public on the proposed work requirement. The state had planned to submit the waiver proposal by October 1, 2018, but it had not yet been received by CMS as of mid-November.

The state’s proposed waiver draft, which would take effect on or after February 1, 2019 (depending on if/when it’s approved) would:

  • Require non-exempt SoonerCare enrollees, age 19-50, to work at least 20 hours per week (or participate in various community engagement activities, including community service, job training, etc. for a total of 20 hours per week).
  • Allow the state to waive retroactive eligibility (except for blind, elderly, and disabled population, and Tax Equity and Fiscal Responsibility population).

Various populations would be exempt from the work requirement. Exemptions would include pregnant women, a caretaker of a child under 6 (or incapacitated person of any age), people participating in substance abuse treatment, disabled enrollees, those who are medically or physically unable to work, etc.

The state estimates that out of 102,000 SoonerCare enrollees who are age 19 to 50, roughly 6,000 would be subject to the work requirement, as the rest would be exempt.

If a non-exempt person did not comply with the work requirement, their Medicaid coverage would be suspended. After at least one month of suspension, the person would be allowed to re-apply for Medicaid, but would have to demonstrate that they’re in compliance with the work requirement.

The draft proposal notes that non-elderly adult Medicaid enrollment in Oklahoma has been relatively flat since 2014, but “is expected to decline as members move from public assistance to community engagement by becoming gainfully employed as a result of the education and training initiatives under this demonstration.” In other words, they expect people to lose their Medicaid coverage — which could happen because a person works enough that their income exceeds the Medicaid eligibility cap (in 2018, for a single parent with one child, that’s less than $7,000 in annual earnings in 2018), or because they fail to comply with the work requirement (which can happen for a variety of reasons including lack of understanding of the reporting requirements, even for people who are working).

Still no Medicaid expansion in Oklahoma

Oklahoma is one of 14 states that continues to reject federal funding to expand Medicaid (there are still 19 states where Medicaid expansion hasn’t taken effect as of late 2018, but Virginia’s Medicaid expansion takes effect in January 2019 and four other states —  Maine, Utah, Idaho, and Nebraska — are expected to expand Medicaid in 2019 based on ballot initiatives passed by their voters).

The Kaiser Family Foundation estimates that there are 142,000 uninsured residents in Oklahoma, and the majority of them (59 percent) are in the Medicaid coverage gap. That’s 84,000 adults who are in households with income below the poverty level, and who don’t qualify for any financial assistance with health insurance. They aren’t eligible for Medicaid because Oklahoma has refused to expand Medicaid. But they also aren’t eligible for premium subsidies in the Oklahoma exchange because their income is below the poverty level.

Premium subsidies aren’t available to people with income below the poverty level because when the ACA was written, the assumption was that people at that income level would be eligible for expanded Medicaid in every state (lawmakers took care to ensure that premium subsidies would be available for recent immigrants with income below the poverty level, as they aren’t eligible for Medicaid). But the Supreme Court ruled in 2012 that state’s could not be compelled to expand Medicaid, and Oklahoma is one of the states that still has not done so.

Due in large part to lack of Medicaid expansion, Oklahoma is one of only two states where the uninsured rate is still above 14 percent. According to US Census data, 14.2 percent of Oklahoma residents were uninsured in 2017. Texas is the only state with a higher uninsured rate. Nationwide, the average uninsured rate was 8.7 percent in 2017.

Democrats in Oklahoma’s legislature have been pushing for Medicaid expansion for years. But Republicans hold a substantial majority in both chambers of the state’s legislature, and Governor-elect Kevin Stitt will continue Governor Mary Fallin’s opposition to Medicaid. The Democratic candidates for governor in Oklahoma’s 2018 election would have pushed for Medicaid expansion if they had won, but that didn’t happen.

By not expanding Medicaid, Oklahoma is missing out on $8.6 billion in federal funding between 2013 and 2022. 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 a ten-year period, 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 the existing Medicaid population, and they’ve expressed concerns about the sustainability of adding more people to the state’s Medicaid program.

Lawmakers rejected controversial legislation in 2016, but it likely wouldn’t have expanded Medicaid even if it had passed

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 have then been deposited into the state’s “Healthcare Revolving Fund” and could have been 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.

Failed attempt to cut Medicaid eligibility for parents

Despite not expanding Medicaid under the ACA, Oklahoma also 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 remained 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 41 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 $6,750 in 2018.

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 was “working with some folks to design something” in terms of legislation to expand Medicaid in Oklahoma under the ACA.

Oklahoma considered privatizing Medicaid, but backed away from the idea in 2017

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. But in mid-2017, Oklahoma cancelled the Request for Proposals for Medicaid managed care organizations.

As of 2018, 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.

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 41 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, some college students with limited income, and people who are aged, blind, or disabled.

As part of a demonstration waiver that was approved in 20019, up to 3,000 full-time college students aged 19 – 22 in Oklahoma could be covered under Medicaid if their incomes don’t exceed 200 percent of the poverty level (the cap was raised to 250 percent in 2010, but eligibility for students who don’t work for a qualifying employer is limited to 100 percent of the poverty level). The state has clarified that dependent college students must count their parents’ household income, whereas independent college students (who aren’t considered dependents for tax purposes) can enroll based on their own income. SB1548, introduced in February 2016, 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.

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 4,543 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 September 2018, there were 13,418 enrollees in the employer-sponsored insurance program, and 5,053 in the individual insurance program. This was down from a total of about 30,000 enrollees in 2013.

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 84,000 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 received another waiver extension through the end of 2018, and Insure Oklahoma was again part of the waiver that CMS approved for 2019-2023.


Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

How to apply in OK

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

Eligibility: 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.

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