Stitt sets Medicaid vote. How does it compare to his plan?

BY TREVOR BROWN
Oklahoma Watch
04/22/2020 01:00 PM
Main Cherokee Phoenix
Oklahoma Watch is a nonprofit, nonpartisan media organization that produces in-depth and investigative stories on important issues facing the state. For more Oklahoma Watch content, go to oklahomawatch.org. COURTESY
After years of debate and political fights, Oklahomans learned April 17 when they will get to vote on a proposal to use state and federal funds to extend health-care coverage to 200,000 low-income residents.

Gov. Kevin Stitt signed a proclamation putting State Question 802 on the June 30 primary election.

The citizen-led ballot measure seeks to expand the state’s Medicaid program and have Oklahoma join 36 other states that have adopted the optional Obama-era Affordable Care Act measure.

Organizers have been anxiously waiting for months for Stitt to decide whether the proposal will be decided on the June primary ballot or November general election one.

Now that the election set, the debate will heat up over whether voters should support the state question and the traditional expansion three dozen other states have adopted or go with Stitt’s two-phase Medicaid expansion plan, which could ultimately add more flexibility, as well as more restrictions, to the program.

Who would be covered?

One of the biggest differences between SQ 802 and Stitt’s proposal is how many people it would cover.

Oklahoma’s Medicaid program, known as SoonerCare, is now open to low-income residents who are children, parents with children under 19, pregnant women or are blind, disabled or elderly.

The state question proposes a straightforward expansion that would expand coverage to adults under 65 who make up to 138% of the federal poverty level, or up to an annual salary of $17,236 for an individual or $35,534 for a family of four.

Stitt’s initial phase mirrors SQ 802. His administration has submitted a state plan amendment to the federal government that would expand coverage to adults earning up to 138% of the poverty level.

But Stitt is also seeking a federal waiver that would allow the state to make other changes to how expansion operates. That includes a cost-sharing provision that would charge premiums for thousands of people in newly covered group, which could add up to $120 per year. It would also require the new enrollees to meet work requirements to keep their coverage.

The state’s waiver application, developed before the COVID-19 pandemic emerged, projects that almost 152,000 of the newly eligible group would sign up in the first year of implementation.

But the application acknowledges the work requirement and cost-sharing provision will likely depress enrollment. It projects that 5%, or 7,600, fewer Oklahomans would gain coverage with Stitt’s waiver provisions compared to the straight, traditional expansion.

The fallout of COVID-19, however, is likely to increase how many will be eligible for coverage in both plans.

With thousands of Oklahomans seeing layoffs or pay cuts in the past month – with more likely coming in the weeks and months ahead state officials anticipate many more will fall under the income thresholds to gain coverage under Medicaid, including the new expansion group.

Stitt spokesman Charlie Hannema said it is not clear what that number will be.

How would the plans be funded?

Like the enrollment estimates, it’s also unclear how much the proposals could now cost because of the pandemic.

Before the outbreak, state officials pegged the price tag for straight expansion at about $150 million, with the rest, about $1.1 billion, coming from the federal government. 

Stitt proposed funding the first year of his proposal, which calls for a straight expansion while his waiver application is reviewed, through a mix of expected savings and increased provider fees that hospitals pay. He called for a constitutional amendment to divert payments from the Tobacco Settlement Endowment Trust to pay for future costs.

SQ 802, however, is silent on how its version of expansion would be funded.

Organizers said they would defer to the Legislature to make that decision. Because the state question would create a constitutional amendment, lawmakers couldn’t ignore the mandate.
Stitt’s plan also calls for the state to move to a block-grant model for expansion. But little is known about how this would work or how it would affect the state’s costs.

When would the plans take effect?

If SQ 802 is approved this June, the ballot language requires expansion to take effect by July 1, 2021.

Stitt’s plan could begin this year, but it’s unclear if this will happen.

The governor wants the first phase of his plan – straight expansion – to take effect July 1, 2020. He then hopes his waiver application will be approved before year-end so additional changes, including work and cost-sharing requirements, would kick in July 1, 2021.

But whether the first phase will begin in 2½ months depends on whether Stitt and the Legislature can reach a funding agreement. Even before the epidemic hit the state, the executive and legislative branches had yet to come to terms.

Agreement could be shakier if the proposal’s price tag increases and as lawmakers scramble to deal with COVID-19’s budget impact on the state.

How could the plans be changed?

One of the key differences between SQ 802 and Stitt’s plan comes down to how they are put in place.

As a constitutional amendment, SQ 802 could not be easily changed without another popular vote.

Organizers say this would safeguard the plan from being watered down or repealed altogether by the Legislature’s GOP majority, which has opposed Medicaid expansion for years.

But Stitt has cited the rigidness of the state question as a reason to support his alternative. He said his version could be changed through legislative or executive action, which gives the state more flexibility and frees it up from future funding mandates that could be unaffordable.

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