Fallin rejects Obamacare exchange, Medicaid expansion

Oklahoma Gov. Mary Fallin announced today that Oklahoma will not create a state-based Obamacare exchange or participate in Obamacare's Medicaid expansion:

For the past few months, my staff and I have worked with other lawmakers, Oklahoma stakeholders and health care experts across the country to determine the best course of action for Oklahoma in regards to both the creation of a health insurance exchange and the expansion of Medicaid under the Affordable Care Act. Our priority has been to ascertain what can be done to increase quality and access to health care, contain costs, and do so without placing an undue burden on taxpayers or the state. As I have stated many times before, it is my firm belief that PPACA fails to further these goals, and will in fact decrease the quality of health care across the United States while contributing to the nation's growing deficit crisis.

Despite my ongoing opposition to the federal health care law, the state of Oklahoma is legally obligated to either build an exchange that is PPACA compliant and approved by the Obama Administration, or to default to an exchange run by the federal government. This choice has been forced on the people of Oklahoma by the Obama Administration in spite of the fact that voters have overwhelmingly expressed their opposition to the federal health care law through their support of State Question 756, a constitutional amendment prohibiting the implementation of key components of PPACA.

After careful consideration, I have today informed U.S. Secretary of Health Kathleen Sebelius that Oklahoma will not pursue the creation of its own health insurance exchange. Any exchange that is PPACA compliant will necessarily be 'state-run' in name only and would require Oklahoma resources, staff and tax dollars to implement. It does not benefit Oklahoma taxpayers to actively support and fund a new government program that will ultimately be under the control of the federal government, that is opposed by a clear majority of Oklahomans, and that will further the implementation of a law that threatens to erode both the quality of American health care and the fiscal stability of the nation.

Furthermore, I have also decided that Oklahoma will not be participating in the Obama Administration's proposed expansion of Medicaid. Such an expansion would be unaffordable, costing the state of Oklahoma up to $475 million between now and 2020, with escalating annual expenses in subsequent years. It would also further Oklahoma's reliance on federal money that may or may not be available in the future given the dire fiscal problems facing the federal government. On a state level, massive new costs associated with Medicaid expansion would require cuts to important government priorities such as education and public safety. Furthermore, the proposed Medicaid expansion offers no meaningful reform to a massive entitlement program already contributing to the out-of-control spending of the federal government.

Moving forward, the state of Oklahoma will pursue two actions simultaneously. The first will be to continue our support for Oklahoma Attorney General Scott Pruitt's ongoing legal challenge of PPACA. General Pruitt's lawsuit raises different Constitutional questions than previous legal challenges, and both he and I remain optimistic that Oklahoma's challenge can succeed.

Our second and equally important task will be to pursue state-based solutions that improve health outcomes and contain costs for Oklahoma families. Serious reform, for instance, should be pursued in the area of Medicaid and public health, where effective chronic disease prevention and management programs could address the trend of skyrocketing medical bills linked to avoidable hospital and emergency room visits. I look forward to working with legislative leaders and lawmakers in both parties to pursue Oklahoma health care solutions for Oklahoma families.

Here is the heart of the letter Fallin sent to U. S. Secretary of Health and Human Services Kathleen Sebelius. In the letter, Fallin also designates Oklahoma Secretary of Health and Human Services Terry Cline as the primary contact for the State of Oklahoma for anything related to Obamacare.

I am writing in response to the Department of Health and Human Services' (HHS) request that each state provide a declaration letter indicating their option for building a health insurance exchange as outlined in PPACA. While I remain deeply committed to the health of Oklahomans, it would be irresponsible of me to commit our state to the development of an insurance exchange based on the information provided by HHS to date. Our state will not establish a transitional reinsurance program as outlined in PPACA. However, Oklahoma will elect to make all final eligibility determinations for our citizens referred to Medicaid from a federal insurance exchange.

I continue to believe there are viable market-based solutions that can be found to facilitate greater access to health insurance coverage in Oklahoma. My hope is that we can engage in future conversations that allow states the flexibility necessary to engage in true healthcare reform, create efficiencies in entitlement programs and empower individuals to take responsibility for their own health.

Fallin's decision was greeted with applause and appreciation by free-market organizations in Oklahoma.

Ronda Vuillemont-Smith, head of the Tulsa 912 Project Tea Party organization and a leader of the successful effort to defeat the Tulsa County Vision2 sales tax scheme, thanked Gov. Fallin and congratulated Tea Partiers for their phone calls and emails urging the governor to take this step. Vuillemont-Smith asked Tea Party members to "express our appreciation in the same way we expressed our opinions -- call Governor Fallin's office and say, 'Thank you!'"

Oklahoma Council of Public Affairs president Michael Carnuccio:

"Gov. Mary Fallin faced a critical decision today -- and she chose wisely. Her courageous rejection of fleeting federal dollars to expand Medicaid in Oklahoma improves the odds that the state government will have the means to adequately fund important core services -- including transportation infrastructure, education and public safety -- for years to come. The appeal of federal funds for an expansion of Medicaid is obvious. What is less obvious is that, under the Affordable Care Act, the federal government will gradually reduce Medicaid funding -- and the states will be left to pick up the tab for any well-intended, but short-sighted expansion of the program. With the expansion, the cost of the program to Oklahoma taxpayers by 2023 would have been roughly $6.5 billion -- almost the exact amount of the entire current state-appropriated budget. Thanks to the governor's vision, we can now pursue Medicaid-reform solutions at the state level that will be fair for taxpayers and program beneficiaries alike. The way to save our country is through strong states -- and those start with a strong governor. Therefore, today, we applaud Gov. Fallin's bold leadership."

Americans for Prosperity Oklahoma state director Stuart Jolly:

"AFP applauds the actions of Governor Fallin to reject creating a health insurance exchange in the state of Oklahoma" said Stuart Jolly, AFP Oklahoma State Director. "Oklahoma's participation in an exchange would increase insurance premiums on consumers and taxes on hardworking Oklahoma families."

Multiple governors have announced this week that they will not create an exchange. This list now includes John Kasich (OH),Terry Branstad (IA), Mike Pence (IN), Dave Heineman (NE), Paul LePage (ME) Robert Bentley (AL), Bobby Jindal (LA), Sam Brownback (KS), Rick Perry (TX), Nikki Haley (SC), Nathan Deal (GA), Robert McDonnell (VA), Jay Nixon (MO) and others. AFP supports these governors.

"Many governors joined together to send a strong message to Washington" Jolly continued. "AFP commends Governor Fallin for her leadership in protecting the Sooner State."

The federal government is offering unlimited grants to states to create an exchange between now and the end of 2014. All exchanges must be self-funding starting in 2015. Each governor must notify the federal government by Friday, December 14, 2012, of his or her decision whether to create a state-based health insurance exchange, defer to the federal government or partner on a hybrid-exchange.

"Federal funds are flowing freely to buy state compliance, but state budgets will take the hit in two short years. Governor Fallin shows real leadership in rejecting these temporary funds." said Nicole Kaeding, AFP state policy manager. "Creating an exchange puts state taxpayers on the hook for millions of dollars every year. States should reject these bloated bureaucracies."

Oklahoma Republican Party chairman Matt Pinnell:

"I'd like to commend Governor Fallin for today's announcement that Oklahoma will not institute a state healthcare exchange," said OKGOP Chairman Matt Pinnell. "In 2010, nearly 65% of Oklahomans voted to oppose Barack Obama's takeover of our healthcare system, and Governor Fallin's decision today reinforces those wishes. The reality is, governors will have no real control over these exchanges. Let the Obama Administration sleep in the bed they made."

Governor Fallin also announced that Oklahoma will not take part in the Medicaid expansion that is part of the Affordable Care Act.

"Estimates show Oklahoma would incur costs of nearly a half a billion dollars between now and 2020 were we to expand Medicaid," continued Pinnell. "These additional costs to the State of Oklahoma are irresponsible and would result in cuts to vital core functions of state government."

"Like Governor Fallin, we continue to support Attorney General Scott Pruitt's ongoing legal challenge to the Affordable Care Act," said Pinnell. "We are confident that the challenge raised by the State of Oklahoma will ultimately succeed. In the meantime, we again commend Governor Fallin for continuing to uphold the wishes of the vast majority of Oklahomans."