Oklahoma Engaged: Voters rejected State Question 814 and put Medicaid expansion funding on lawmakers

Legislative leaders say they have few options, and cuts to traditional Medicaid or education could be on the way

• Catherine Sweeney
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  Catherine covers health for StateImpact Oklahoma. She grew up in Muskogee and went to Oklahoma State University. She has covered politics and policy in Colorado's high plains, Oklahoma City and Washington, D.C. You can reach her at catherine@stateimpactoklahoma.org, @cathjsweeney on Twitter or 405-673-5226 on Signal.

Back in June, Oklahoma voted to expand Medicaid. Now voters have given the state legislature an assignment: Find another way to pay for it.

Voters rejected State Question 814 this week. That blocked a move to divert funding away from the Tobacco Settlement Endowment Trust, a public health agency known as TSET. The proposal would have taken annual payments into that endowment and rerouted them to pay for Medicaid expansion.

Oklahoma’s part-time Legislature won’t convene again until the first week of February. They have until the end of May to build a budget that will include expanded Medicaid.

Medicaid uses state and federal funding to offer poor Americans health coverage. Traditional Medicaid — that is, Medicaid without expansion — mostly covers children, seniors, people with disabilities or people who are pregnant. When voters approved the program’s expansion, they opened Medicaid to low-income adults. Analysts expect about 200,000 new people will qualify. It will cost the state about $150 million to pay for that coverage, and in return, the state will pull down about $1 billion in new federal health care funding.

Many of the organizations that supported the state question to expand Medicaid opposed the state question to move TSET funding. Matt Glanville is the government relations director for the American Cancer Society Cancer Action Network.

“We enthusiastically supported Medicaid expansion. And we will be happy to work with the legislature and the governor’s office to find an alternative solution,” he said.

He says the Legislature proved it can fund Medicaid expansion without TSET funding when it passed a budget that did so this year. The governor vetoed it, arguing that the bill was crafted behind closed doors and used irresponsible accounting gimmicks.

State Sen. Kim David authored the measure that put State Question 814 on the ballot. She says paying for this new cost will take one of two things: New revenue or cuts. And new revenue isn’t likely.

There are two streams of revenue that have been pitched. Raising income taxes and raising taxes on hospitals. She says raising the burden on taxpayers, given the pandemic’s economic fallout, is off the table.

“Those (are the) same tax payers that, because of the pandemic, are having trouble even putting food on their tables,” she said.

Raising costs for hospitals would also be complicated. The coronavirus led to suspended elective procedures this summer. That delayed care spurred hundreds of hospital layoffs across the state.

But Patti Davis, the President of the Oklahoma Hospital Association, says there’s another issue. Gov. Kevin Stitt is moving forward to overhaul how Oklahoma pays providers through Medicaid. It’s complicated, but will mean less certainty around how much taxes hospitals pay.

So, as Senator David says, Oklahoma can make room in the budget by finding new revenue or cutting, and that the latter looks more likely. There aren’t many places to cut either. One, ironically, would be Medicaid.

“Sadly enough, I think the the losers are going to be the existing people that are on Medicaid, the aged, blind and disabled, pregnant women and children,” she said. “And because if there isn’t money to address all that, then cuts will be made in the existing population.”

In the past, when the Oklahoma Legislature has cut Medicaid, it cut the amount of money providers got for serving Medicaid members. But the options are either do that again, reduce the number of services covered, or limit the number of people enrolled. As of now, in Oklahoma, if you apply for the program and are eligible, you’re in. There is no cap or waiting list. But the Legislature could change that.

There is one other place the cuts could come.

“The only other really large pot of money that we have to even look at is education,” David said.

State Representative Forrest Bennett is the House Democratic Assistant Minority leader. He said that his caucus agrees: raising taxes on Oklahomans recovering from the pandemic is a nonstarter. But, he says having to find a way to fund Medicaid expansion in such a trying economic time would have been hard to predict, but is at least in part the Legislature’s fault. The House Democrats have pushed for Medicaid expansion for nearly a decade, since the Affordable Care Act created the option.

“We find ourselves in a perfect storm of some unforeseen circumstances, and some that were, quite frankly, foreseen,” he said. “We find ourselves in this medicaid situation because we kicked the can on this work as a Legislature and sent it to the people.”

Bennett reiterated that because Medicaid Expansion amended the constitution, the Legislature doesn’t have a choice but to obey the will of the people. How lawmakers get it done will be one of the more intriguing issues to watch next session.

Oklahoma Engaged is an election project by NPR member stations in Oklahoma supported by the Inasmuch Foundation, the Kirkpatrick Foundation and Oklahoma Humanities.