The Enid News and Eagle, Enid, OK

National and world

January 12, 2013

Medicaid rejection prompts look for new options

OKLAHOMA CITY — Gov. Mary Fallin's decision to reject a Medicaid expansion that would have made health coverage available to roughly 200,000 uninsured low-income, working class Oklahomans has left health officials scrambling to come up with alternative ways to make health care available to this population.

Although no concrete proposals have been developed, the Oklahoma Health Care Authority on Thursday approved a $500,000 sole-source contract with Utah-based health consultant Leavitt Partners to develop ways to target the nearly 20 percent of Oklahoma's population that have no health insurance. The contract is expected to begin on Feb. 1, and OHCA officials say they hope the group can develop recommendations the Legislature will be able to enact before the session concludes at the end of May.

Fallin drew praise from tea party groups and conservative lawmakers when she announced in November that Oklahoma would reject the Medicaid expansion allowed under President Barack Obama's sweeping health care law, citing the costs to both the state and federal government. The expansion would have allowed Oklahomans earning up to 133 percent of the federal poverty level, or about $30,000 for a family of four, to be eligible. Under current law, only children in families earning up to 185 percent of the federal poverty level are Medicaid eligible. For adults, the eligibility level is 37 percent of federal poverty.

But her decision was criticized by hospital and other health officials who contend the costs of caring for Oklahoma's uninsured already is falling on hospitals in the form of uncompensated care and leading to higher health care costs for the insured.

The governor has said she supports an "Oklahoma-based solution" to address the problem of Oklahoma's uninsured, and her Secretary of Health Terry Cline said he expects to work with Leavitt Partners and other health industry stakeholders to focus on improving the health of Oklahomans rather than just expanding coverage.

Cline said he envisions a program in which both providers and consumers are given incentives to improve health outcomes and keep costs low.

"We are currently putting billions of federal and state money into our (health care) system," Cline said. "The question is are we getting the most bang for our buck. Our current system pays for the more tests you run, the more you get paid. There is very little in our system that actually aligns payment with improved health and improved health outcomes.

"Many people believe our system should be entitled a sick-care system instead of a health care system. We're not structured to promote wellness."

Cline said he anticipates developing a system unique to Oklahoma and then seeking a federal waiver that would allow federal money to help fund the program.

Health experts agree that any such proposal developed by Oklahoma would require an infusion of federal funds.

"We are supportive of Oklahoma pursuing an Oklahoma plan, but we are utterly convinced that any Oklahoma plan ... is still going to be a partnership of both the federal government, state government and, we think, the private side," said Craig Davis, executive director of the Oklahoma Hospital Association, which lobbied hard for Fallin to support the Medicaid expansion. "We still need to impress upon our legislative leaders the important role that federal funding plays in providing funding to hospitals to provide care for those who are uninsured or underinsured. That's just a simple fact."

Most health experts point to Insure Oklahoma as an ideal program for providing health coverage to more uninsured Oklahomans. Insure Oklahoma, which targets working adults earning up to 200 percent of the federal poverty level, is a partnership in which the health insurance premium costs are shared between the state (60 percent), the employer (25 percent) and the employee (15 percent). The state's share is funded with tobacco tax revenues and matching federal dollars.

But the program, which provides coverage to about 30,000 Oklahomans, is scheduled to lose its federal funding at the end of the year because most of those eligible for the program would have been absorbed under the expanded Medicaid option.

Davis said one option would be to seek a federal waiver that would allow the Insure Oklahoma program to continue.

"I just think it's such a good model that it deserves very serious consideration," Davis said. "What we're hearing is that the federal administration wants to accomplish certain objectives, and they're willing to be flexible if those objectives are met. I'm hopeful they'll allow that to be considered."

Still others suggest the Medicaid expansion, which would immediately provide more than $500 million in federal funding annually to the state for the first three years, is the only realistic solution for addressing the needs of the uninsured.

"I don't think there is any good option for tackling the challenge of the uninsured in Oklahoma that does not involve accepting the Medicaid expansion," said David Blatt, director of the Oklahoma Policy Institute, a think-tank that promotes funding for programs targeting low-income Oklahomans. "Anything else would either fall far short in terms of the number of people that would be covered or the expense that would end up being assumed by the state itself."

The incoming director of the Health Care Authority, the state agency that oversees the Medicaid program in Oklahoma, acknowledges that developing solutions for targeting the uninsured won't be an easy task, but said he's confident there are other solutions available.

"I'm never going to be in a position to say there are no other options," said Nico Gomez, who was chosen last week to become the agency's new chief executive officer. "It could be tough, but I'm never going to be in a position where I say there are no other options. Let's push. Let's think. Let's be innovative."


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