OK Becomes First State to Adopt Medicaid Expansion During COVID-19

July 01, 2020 - Oklahoma is now the first state to turn to Medicaid expansion during the coronavirus pandemic, a state ballot determined.

The vote passed by a margin of less than one percentage point, local news outlets reported. The results were sharply divided by a conflict between urban and rural community perspectives.

State Question 802 did not simply amend state regulations to allow for Medicaid expansion, but instead it added a new article to Oklahoma’s state constitution itself. The new article allowed adults with incomes of up to 133 percent of the federal poverty level to be eligible for Medicaid.

The amendment also protected Medicaid expansion from significant alterations.

“Under this measure, the State cannot create additional restrictions that make it more difficult to qualify for expanded Medicaid coverage than it is to qualify for the Medicaid program currently in place,” the question explained.

This would prevent policymakers from adding work requirements, such as those that neighboring Arkansas implemented to the detriment of 17,000 workers who lost their healthcare coverage.

Supporters of State Question 802 argued that the amendment would allow almost 200,000 Oklahomans to access affordable healthcare coverage. They also said that it would bring in over a billion dollars in federal funding annually and that it would keep rural hospitals open.

Opponents, such as Oklahoma governor Kevin Stitt, grounded their arguments largely in lack of funding for expansion.

“From day one, I’ve said one-time funds are not the way to pay for Medicaid expansion,” State said in a widely circulated statement after vetoing a bill intended to fund his Medicaid expansion plan.

That previous Medicaid expansion plan took advantage of the Healthy Adult Opportunity block grant demonstration from CMS. Oklahoma was the first state to apply for the block grant demonstration in April 2020. However, the governor backtracked when he found that a hospital fee would not produce sufficient revenue.

Now that State Question 802 has passed, Oklahoma must be prepared to expand Medicaid by July 2021.

The final decision came as the coronavirus pandemic continued to spread across the state. According to the Oklahoma State Department of Health’s coronavirus page, Oklahoma saw more than 13,100 cases between March and the end of June. The state added around 585 more cases in the 24 hours as voters submitted their decisions on the State Question 802.

At the beginning of the public health crisis, the Kaiser Family Foundation urged the federal government and states to support Medicaid expansion as a protection against coverage loss during the pandemic.

States could expand Medicaid in one of three ways, Kaiser Family Foundation suggested.

First, they could broaden eligibility—which is what Oklahoma chose to do by increasing the eligible income level. They could also enact measures that ensured eligible individuals were enrolled in Medicaid. And lastly, they could seek additional waivers from CMS that provided more coverage and care access flexibility.

States that already had Medicaid expansion in place have weathered the pandemic’s soaring unemployment rate better than states without Medicaid expansion, an Urban Institute study found in May 2020.

“With historic levels of joblessness around the corner, millions of workers and their families are about to lose their employer coverage,” Katherine Hempstead, senior policy adviser at the Robert Wood Johnson Foundation, said in a press release emailed to HealthPayerIntelligence. “Our safety net is about to be tested, and it’s going to work a lot better in states that expanded Medicaid.”

In Medicaid expansion states, if unemployment hit 20 percent, at least 9 million—or more than half of those who lost their employer-sponsored health plan—would enroll into Medicaid. Meanwhile, in nonexpansion states at 20 percent unemployment, only 3 million—or one-third of all those who lost their employer-sponsored health plans—would be able to fall back on Medicaid.

Oklahoma’s decision increases the number of states with Medicaid expansion to 37 states plus the District of Columbia—or nearly three-quarters of the states.