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The Bogus Budget: Medicaid Expanded Anyway

May 11, 2017 - 4:16pm CDT

It could be worse. States that adopted the Obamacare Medicaid expansion will see higher costs this year thanks to a pre-planned decrease in federal funding.

Oklahoma lawmakers refused to bow to the demands of the Obama Administration and Oklahoma Health Care Authority. They stood up for the premise that Medicaid should remain a safety net for the most vulnerable, not an entitlement for able-bodied adults. And yet Medicaid has been growing in Oklahoma nonetheless, eating up an ever larger portion of state spending.

In today’s installment of the Bogus Budget blog series, we look at the Oklahoma Health Care Authority, which includes the state’s Medicaid program. Previous posts have examined the Space Industry Development Authority, higher education, the Department of Emergency Management, OETA, K-12 education, and the Department of Environmental Quality. In each agency, while some politicians prefer to pretend the only money spent comes from legislative appropriations, the reality is that much of the funding flows around the legislature. This is why, even when appropriations go down, some agencies spend more than ever.

During last year’s budget debate, OHCA leaders again called for Medicaid expansion and threatened that, without it, most Oklahoma nursing homes would shut down. It was a craven claim, easily disproved, and both appropriations and total spending at OHCA actually went up.

Source: Oklahoma State Senate

In fact, Medicaid enrollment and costs have been increasing in Oklahoma for years. A higher percentage of Oklahomans are covered by either Medicaid or the related Children’s Health Insurance Program than in Texas, Kansas, Missouri, and a dozen other states. Looking at data from all states between 2000 and 2014, The Pew Charitable Trusts found Oklahoma had the 11th largest increase in state spending as a share of the total state budget.

In 2008, the legislature appropriated $771 million to the agency. The agency had 410 staff and spent a total of $3.8 billion. OHCA last year had 556 staff, and (as shown in the chart above) received an appropriation of nearly $1 billion to support total spending of $5.6 billion. (Numbers come from these Senate reports; the Governor’s budget book includes similar and additional data.)

OHCA has a critical mission. Medicaid was designed to be the safety net for those who are poor and disabled, elderly, or children. Oklahoma is spending more than ever on these programs. Both taxpayers (who foot the bill for every state and federal dollar) and service recipients deserve an honest conversation about these costs and an active consideration of reforms.