Wayne Green: Fallin's Medicaid decision narrows her options
By: Wayne Greene
December 23, 2012
Gov. Mary Fallin has made up her mind about expanding the state's Medicaid program - she's not going to do it - but the discussion behind closed doors hasn't ended.
Fallin and key members of her staff - including Health Secretary Terry Cline, Policy Director Katie Altshuler and Communications Director Alex Weintz - met with top staff and leaders of the Oklahoma Hospital Association for about an hour Dec. 14.
"The purpose of the meeting was to answer their questions about Governor Fallin's recent decision on Medicaid expansion, listen to their concerns and talk about how to move forward," Weintz said.
"Governor Fallin reiterated that we want their input and advice as we work to shape an Oklahoma solution for improving health care. It was a cordial and constructive meeting," he said, adding, "The governor has not changed her decision regarding Medicaid expansion."
Medicaid expansion could be a key element in dealing with the state's uninsured population of about 625,000 people - roughly 17 percent of the state population, according to the U.S. Census Bureau.
Under the Affordable Care Act - also called "Obama- care" - the federal government would pay for 100 percent of the new benefit costs for Oklahomans up to 133 percent of the federal poverty rate starting in 2014.
That means, for example, that an Oklahoma family of four earning $30,657 would be eligible for Medicaid coverage.
The Medicaid expansion would bring health-care coverage to 130,000 to 190,000 uninsured adult Oklahomans.
Fallin rejected the Medicaid expansion, arguing that the state couldn't afford it.
The extension could cost the state up to $475 million through 2020, Fallin has said, although that number is under challenge and is clearly a worst-case scenario.
Figured another way, the state ends up making money on the process, but that's a different argument for a different day.
The problem is, once the governor rejects the Medicaid expansion, there isn't really any place to go that would lead to a significant reduction in the number of uninsured people in the state.
Last week, Cline spoke of expanding the Insure Oklahoma program, which covers about 30,000 people and is already dependent on federal funding. The U.S. Department of Health and Human Services has made it clear that it isn't interested in continuing Insure Oklahoma-type programs (which mix state tobacco tax funding, employer contributions and Medicaid funding).
The HHS solution? Medicaid expansion.
Here's a crazy part of the whole thing: one presumably unintended consequence of Fallin's decision and the federal government's obstinacy about insisting on Medicaid expansion as the first step in any solution is that some of the state's poorest residents won't be eligible for any sort of help getting insurance.
This is the so-called coverage "crater," a population of about 155,000 Oklahomans who will be left out in the cold when the Affordable Care Act presumably goes into effect in 2014.
Who's in that crater? Anyone who is too poor to qualify to purchase federally subsidized insurance through an exchange, but not categorically eligible for Medicaid.
What is "too poor" for the exchange mean? Because Fallin rejected the Medicaid expansion, the floor for eligibility to be part of the exchange is 100 percent of the federal poverty level. If you earn more than 100 percent, you get a federal subsidy, and a pretty big one. If you earn less than 100 percent, you get nothing.
Currently the federal poverty level is $23,050 a year for a family of four.
What does it mean to be categorically eligible for Medicaid?
To get Medicaid you have to fall into a specific group. Pregnant women are eligible. Children are eligible. The aged, blind and disabled are too.
But working-age adults who don't fall in one of those categories aren't eligible, regardless of how little they earn.
So, earn too little but don't fall in a Medicaid category and you are out of the exchange, out of Medicaid and out of luck.
The Oklahoma Policy Institute and the Oklahoma Health Care Authority estimate that about 155,000 Oklahomans fall into that crater.
Those people will still get health care - typically through a hospital emergency room. They just won't be paying for it.
Families USA estimated in 2005 that the unreimbursed medical costs of Oklahoma's indigent patients represented a $954 million a year hidden tax. The cost is passed on to insured Oklahomans and their employers in the form higher hospital costs and higher insurance premiums.
Patti Davis, executive vice president of the Oklahoma Hospital Association, was in on the meeting with the governor.
She agreed that the discussion was cordial but said medical providers haven't given up on the Medicaid expansion issue.
In meeting with legislators and anyone else who will listen, hospitals will make their case, Davis said.
"This is really a big issue of low-income Oklahomans and the hospitals that serve them," Davis said. "We will continue to press on this issue. It's far too important not to."