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Medicaid expansion is the new SQ 744


Jonathan Small November 7th, 2012

Remember State Question 744? It required the state to raise its annual per pupil expenditures to at least the average rate of surrounding states. The measure did not raise taxes or designate funding. It was estimated that, if passed, SQ 744 would have increased state spending on common education by $830 million.

Public- and private-sector leaders joined the campaign to publicize its unsustainable structure and potential harm to core services. Voters overwhelmingly rejected it.

Oklahoma lawmakers now face a similar scenario. The Affordable Care Act provides for a massive expansion of Medicaid, allowing states to expand Medicaid to include many individuals below 133 percent of the federal poverty level. This expansion could increase Oklahoma’s Medicaid enrollment by 30 percent.

The ACA, by way of significant tax increases, attempts to provide for the federal share (90 percent long-term) of the Medicaid expansion but makes no provision for the state portion. The availability of current or promised levels of federal Medicaid funding is uncertain. President Obama’s Fiscal Year 2013 budget proposes cutting federal Medicaid assistance and his deficit reduction plan cuts future federal Medicaid assistance.

Federal lawmakers from both major parties have endorsed future cuts to federal Medicaid assistance. Conservatives and liberals agree the Medicaid expansion will increase state spending by hundreds of millions of dollars with full implementation of the ACA.

According to the Oklahoma Health Care Authority, Medicaid spending in the state in 2001 totaled $2 billion. For 2011, it’s $4.4 billion, a 120-percent increase. The state’s share was $495.5 million in 2001 and has increased to over $1.29 billion, a 161-percent increase. State 2000 appropriations to the OHCA were $333.7 million and approximately 6.8 percent of total state appropriations. For 2011, appropriations to it were $993 million and nearly 15 percent of total state appropriations.

Maintenance of effort increased state lawmaker appropriations and authorizations by $80 million for FY 2013, and Medicaid received the largest increase for 2013. Spending by the state on health services (mostly Medicaid) is now the largest portion of total state spending, surpassing all state spending on education.

Medicaid covers more than 60 percent of all Oklahoma births and at least 30 percent of the population in 30 counties. And this is before the increases associated with the ACA Medicaid expansion.

Whether you feel more should be spent on education, public safety, child welfare, roads and bridges, state employees or other government services, ACA Medicaid expansion threatens funding those areas.

Just like the state couldn’t afford SQ 744, the state can’t afford the ACA cost increases without damaging core services and overly burdening taxpayers.

Small is fiscal policy director of the Oklahoma Council of Public Affairs, a free-market think tank.

 
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