No on SQ802: Obamacare Medicaid expansion

The only state question on the June 30, 2020, primary ballot is Oklahoma State Question 802. This would create a new Constitutional Amendment, Article XXV-A, requiring the State of Oklahoma to offer Obamacare Medicaid expansion coverage to anyone below a certain income, regardless of the person's work or family status. While expansion brings in some additional federal funds, it also brings in heavy long-term liabilities that the state must meet, which would result in higher taxes, cuts in other state-funded services (e.g. education), or both.

Oklahoma's governor and legislature have rightly rejected Obamacare Medicaid Expansion until now because of the fiscal time bomb it would create. SQ802 was an initiative petition backed by supporters of greater government control and by those who expect to profit from the mandated increases in government payments to healthcare providers. The proposal will drive up medical costs without providing real access to quality care.

OCPA has a Quick Facts on Medicaid Expansion that notes that "Expanding Medicaid in Oklahoma could divert state resources away from Oklahoma's traditional Medicaid population--children, pregnant women, the elderly, and the disabled--and instead favor the newly eligible population of 628,000 able-bodied, working age adults." The second page of the handout offers 10 suggestions for how to expand access to health care without installing a budgetary doomsday machine in Oklahoma's State Constitution.

Oklahomans should also reject SQ802 because a constitutional amendment is not the appropriate vehicle for this type of legislation. A constitution is deliberately difficult to change, and its content ought to be limited to fundamental rules and rights. (I raised this issue in 2016 with regard to SQ792.) This proposed constitutional language is tied to specific sub-sub-subsections of Federal law and regulations, which could change and render this state constitutional amendment a confusing mess. If this language were in state statutes, the legislature could quickly respond to federal changes that might affect Medicaid; SQ802 doesn't permit that flexibility. In all likelihood, courts would step in to reinterpret the amendment, virtually rewriting it to make the mess make some sort of sense. (The severability clause in Section 4 is practically an engraved invitation for judicial interference.)

Currently children, adults with children in the home, the blind and disabled, and senior citizens are eligible for Medicaid in Oklahoma if their income is below a certain level. SQ802 would make anyone below the income threshold eligible for Medicaid, even able-bodied adults who refuse to work. As you'll see below, Section 2(B) doesn't allow Oklahoma to impose more stringent requirements, such as a requirement for able-bodied, young recipients to be working or studying in order to receive this benefit.

Here is the language that would be added to the Constitution of Oklahoma if SQ802 passes.

SECTION 1. Definitions

As used in this Article:

A. "Centers for Medicare and Medicaid Services" or "CMS" refers to the agency responsible for administering the Medicaid program at the federal level, including review and approval of State Plan Amendments.

B. "Low Income Adults" refers to those individuals over age 18 and under 65 whose income does not exceed one-hundred thirty-three percent (133%) of the federal poverty level, as described by and using the income methodology provided in the federal Medicaid statute at 42 U.S.C. § 1396a(a)(10)(A)(i)(VIII), and who meet applicable non-financial eligibility conditions for Medicaid under 42 CFR Part 435, Subpart E.

C. "Medical assistance" means payment of part or all of the cost of the care and services, or the care and services themselves, or both, as provided in the federal Medicaid statute, 42 U.S.C. § 1396 et seq.

D. "Oklahoma Health Care Authority" refers to the single State agency responsible for administering the Oklahoma Medicaid program pursuant to 42 U.S.C. § 1396(a)(5).

E. "State Plan Amendment" refers to the document(s) the State submits to the Centers for Medicare and Medicaid Services for review and approval before making a change to the program policies, including setting forth the groups of individuals to be eligible for medical assistance.

Section 2. Medicaid Expansion

A. In addition to those otherwise eligible for medical assistance under Oklahoma's Medicaid program, the State shall provide medical assistance under Oklahoma's Medicaid program to Low Income Adults.

B. No greater or additional burdens or restrictions on eligibility or enrollment shall be imposed on persons eligible for medical assistance pursuant to this Article than on any other population eligible for medical assistance under Oklahoma's Medicaid program.

Section 3. Implementation

A. Within 90 days of approval of this Article, the Oklahoma Health Care Authority shall submit a State Plan Amendment and all other necessary documents to seek required approvals from the Centers for Medicare and Medicaid Services to include Low Income Adults as a coverage group in Oklahoma's Medicaid program beginning no later than July 1, 2021.

B. The Oklahoma Health Care Authority shall take all actions necessary to maximize federal financial particpation in funding medical assistance purusant to this Article.

Section 4. Severability

The provisions of this Article are severable, and if any part or provision hereof shall be void, invalid, unconstitutional, the decision of the court so holding shall not affect or impair any of the remaining parts or provisions hereof, and the remaining provisions hereof shall continue in full force and effect.

The Oklahoma Council of Public Affairs has a great deal of research and analysis on the fiscal hazards of Obamacare Medicaid Expansion. Most recently, OCPA policy research fellow Kaitlyn Finley points to tax increases in 13 other states to fund Medicaid expansion:

According to a tally by Governing Magazine last year, 13 states have had to raise taxes, fees, or cut provider rates to fund their state portion of expansion costs. North Dakota cut payment rates to Medicaid providers. California passed a provider tax on hospitals and cigarette sales. Oregon put another tax on health insurance plans and hospitals. Other states like Kentucky and Arkansas have pursued charging premiums and implementing work requirements to make up for program shortfalls.

Although these states' plans to tax hospitals to pay for expansion may seem like an additional financial drain on emergency care providers, in reality, many "nonprofit" hospitals have jumped at the chance to take on this financial "burden" because hospitals may increase their profits thanks to the tax.

Note that while some states have "pursued... implementing work requirements" to reduce the fiscal damage of Obamacare Medicaid Expansion, the authors of SQ802 want to cut off that possibility for Oklahoma.

MORE: State Rep. Mark Lepak sets out the fiscal dangers that Medicaid Expansion would bring, increasing the burden on a budget already strained to its limits by CCP Bat Virus:

Proponents point out that we will bring our federal dollars home with a 9-to-1 federal-to-state match. True statement. However, they also claim the expansion population will be about 200,000 people, costing about $200 million. Actually, up to 628,000 will be eligible, with a price tag over $370 million. When "free health care" is advertised, what should we anticipate from the eligible? And those numbers are just first-year expenses that don't contemplate the rising costs of health care, nor the federal government's habit of shifting costs to the states.

Consider our experience with the existing Medicaid program. From 2003 to 2018, Oklahoma's share of Medicaid expenses grew from $715 million to $2.2 billion. At the same time, we went from 649,000 enrollees to more than a million. We're spending three times as much for less than twice the people. Furthermore, in 2003, Oklahoma was responsible for 29.9% of its Medicaid costs. In 2018, that number was 41.8%. With that track record, the 9:1 match from the feds will become 8:2, then 7:3, and so on. With an increasing federal debt and deficit spending, does anyone think they won't continue to shift more and more costs to the states in the future?

MORE: Both Republican candidates for Senate District 37 are saying they'll vote yes, but SQ 802 will damage budgets for both the Federal Government and the State of Oklahoma. Wish they could both lose:

Emerson, who is married with nine children, is voting for State Question 802, Medicaid expansion, which also appears on the June 30 ballot.

But he said it is important to note that it will increase the federal deficit.

Rogers, who is married with five children, also is supporting SQ 802, but said he doesn't see how the state will be able to afford it, especially given the current budget situation in which state revenues are on the decline.

RELATED: Ray Carter of the Center for Independent Journalism reports that some voters are receiving mailers with a subtext that the voter will be named and shamed if they don't vote in the upcoming election. I have read comments on social media that so far only Democrats and Independents have received these mailers. I surmise that backers of SQ802 are afraid that, with few interesting Democrat primaries on the June 30 ballot, pro-big-government voters who would be inclined to vote yes on 802 won't bother to go to the polls.