Oklahoma Joins List of Red States Eyeing Medicaid Expansion

Governor Mary Fallin's proposal to embrace Medicaid expansion and fund the state share with a cigarette tax comes nearly a year after HHS Secretary Sylvia Burwell made an explicit appeal to work with governors in conservative states.

Ideology is one thing. Dollars and cents are another.

The economics of running a Medicaid system without the federal dollars available under the Affordable Care Act (ACA) have proved untenable in Oklahoma. So on Monday, Governor Mary Fallin and Republican legislators said they’re ready to look at expanding coverage to more residents.

Without the change, Oklahoma was staring at 25% cuts to Medicaid providers, something that would have force many of them to stop seeing low-income patients. Under the proposal, accepting Medicaid expansion would allow Oklahoma to move 175,000 women and children into subsidized coverage while opening Medicaid to 628,000 working-age adults.

According to news reports, the state will fund its 10% share of expansion with a $1.50 per pack increase on cigarette taxes.

Lawmakers who had resisted Medicaid expansion in the past said current realities demand the change. Oklahoma’s Medicaid chief, Nico Gomez, said without expansion, rural providers would not survive and would have to relocate. A hospital executive said as many as 33,000 rural residents would lose access to care.

For Fallin, it’s quite an about face. As Forbes noted, she parted with a Taxpayer Protection Pledge to “oppose a veto and any and all efforts to raise taxes,” as she worked to fill a $1.3 billion budget gap created, in part, by slumping oil prices.

But the reversal isn’t a total surprise for those who have followed HHS Secretary Sylvia Mathews Burwell over the past year. In a July 2015 address to the National Governors’ Association, with Fallin at the table, Burwell pledged to work with those remaining states that had not expanded Medicaid—and try, where possible, to find common ground over issues like work requirements.

Burwell’s posture was seen as an attempt to get as many states into the expansion column as possible before President Obama’s term ends in January. Once states extend coverage to residents, it’s very hard to take it away.

In fact, Michael E. Chernew, PhD, of Harvard and the co-editor-in-chief of The American Journal of Managed Care, predicted at the recent meeting of the ACO and Emerging Healthcare Delivery Coalition that more states would seek expansion if it appears the ACA will survive.