The Edmond Sun

June 7, 2013

BY THE NUMBERS: Medicaid expansion could be good for state

Mickey Hepner
Special to The Sun

EDMOND — Jan Brewer wants to do it in Arizona. John Kasich wants to do it in Ohio. And Rick Snyder wants to do it in Michigan. But we don’t want to do it here.

Brewer, Kasich and Snyder are three staunchly conservative governors who opposed the Affordable Care Act (commonly referred to as “Obamacare”). Yet all of them want to enact a key provision of the program by expanding their state Medicaid programs to cover adults earning up to 133 percent of the federal poverty level (for a family of four this is up to $31,321). In exchange for the program expansion, their states would receive billions of federal dollars. In short, these Republican governors are setting aside their principled objection to the law, to implement a provision that makes financial sense for their states.

It makes sense in Oklahoma too, but we still keep saying “no.”

To encourage states to expand their programs the federal government has promised to pay 100 percent of the expansion cost for the first three years, and no less than 90 percent in the future. Thus far, Gov. Mary Fallin has rejected the federal funds and announced that Oklahoma will not be expanding its Medicaid program. The financial consequences of the decision are quite severe.

According to estimates provided by the Kaiser Family Foundation, Fallin’s decision means that Oklahoma will lose out on $8.6 billion of federal funds from 2014-22. Yes, Oklahoma would have to provide some of the funding — estimated at $689 million through 2022 (but not starting until 2017), but the net return is clearly positive.

Still, Fallin insists that Oklahoma cannot afford to fund the expansion. But the real problem isn’t a lack of money, but a lack of will. Each year Oklahoma taxpayers spend more than $45 million in state funds for Insure Oklahoma, a program that is ending this year. By redirecting these funds to expanding Medicaid would cover more than half the annual cost the state needs to provide the expansion. The Insure Oklahoma program currently covers less than 30,000 Oklahomans whereas the Medicaid expansion would cover 180,000 Oklahomans.

But there is even more money. Because the Medicaid expansion would bring in $8.6 billion to the state economy during the next decade, much of it going to Oklahoma health care providers, there would be an economic boost as well. A 2011 study from economists at Oklahoma State University estimated that the Medicaid expansion would create more than 15,000 new jobs and boost state tax collections by $477 million during the next decade.

In short, by redirecting the Insure Oklahoma funding (a program that is ending anyway) and considering the ensuing economic growth, there is more than sufficient funds to cover the Medicaid expansion. But there are even more savings to consider. Currently, state taxpayers spend millions annually because individuals who would be eligible for this Medicaid expansion aren’t getting the health care they need. For example, we spend millions treating adults at state health clinics — health care that could be covered by this expansion. We spend millions on providing treatment (and even incarceration) for mentally ill individuals because they are not receiving the health care they need. Currently, Oklahoma taxpayers cover 100 percent of these costs. If we accepted the Medicaid expansion, for those eligible to be covered the state would pay less than 10 percent of their health care costs thus saving taxpayers millions of dollars annually.

And let’s not forget that state leaders had no difficulty finding money to fund a tax cut that will have a budget impact four times larger than the Medicaid expansion would.

Expanding Medicaid will provide a multi-billion dollar boost to our state economy while providing health insurance to another 180,000 Oklahomans. We can do this. We should do this. We just don’t want to.

Across the country Republicans are recognizing the benefits of accepting these federal dollars to care for their citizens. Each year we wait, is another year we are economically and morally poorer than we should be.

MICKEY HEPNER is the dean of the College of Business Administration at the University of Central Oklahoma. Hepner serves on the Executive Committee of the Board of Directors for The Oklahoma Academy.