Oklahoma Medicaid Expansion Will Likely Cost State’s Taxpayers

Oklahoma Medicaid Expansion Will Likely Cost State’s Taxpayers
September 25, 2012

Patrick B. McGuigan

Patrick B. McGuigan writes for Oklahoma Watchdog. (read full bio)

Expansion of Medicaid coverage under President Obama’s health care law will either result in long-term savings worth millions to Oklahoma taxpayers, or will cost state taxpayers an additional $11.4 billion.

Thanks to the Supreme Court’s ruling, states that decide not to expand their Medicaid programs won’t lose their existing funding.

David Blatt of the progressive Oklahoma Policy Institute in Tulsa says cost savings will offset increased government expenditures on health care.

“Focusing only on new outlays while ignoring new revenues and cost savings is like saying that making the playoffs cost the Oklahoma City Thunder an additional $5 million for staff and building expenses, while ignoring the additional revenue brought in by ticket sales and concessions,” Blatt said.

But according to Jonathan Small of the Oklahoma Council of Public Affairs, a free market think tank, Oklahoma “can’t afford the Medicaid expansion. Health and Human Service spending by the state, which includes Medicaid spending, is already the largest portion of the total state budget and continues to grow.”

History Suggests Rising Costs

Even the state’s own experts aren’t sure who’s right.

“It’s a very difficult task to estimate revenues for the next year, much less several years down the road,” state finance director Preston Doerflinger said.

But recent state history suggests government health care programs tend to become more expensive no matter what the predictions are at the time.

Oklahoma’s 2001 Medicaid spending totaled $2 billion, of which the state contributed about $495.5 million. Last year the program cost $4.4 billion, of which the state contributed nearly $1.3 billion. Health care is now the state’s top budget expense, as it is in many other states, ahead of even education.

Fallin Plans to Wait on Decision

In 2011, after working on a health insurance exchange required under Obama’s law, Gov. Mary Fallin reversed field and was among the first governors to defy the mandate. After the Supreme Court upheld the law, Fallin indicated she was in no hurry to address the issue.

The state legislature has its own wait-and-see approach. The House-Senate Joint Committee on Federal Health Care Law studied the Medicaid issue but took no action. A spokesman for the governor said she’ll decide on expansion after November’s election, and will listen to “all the stakeholders.”

Patrick B. McGuigan

Patrick B. McGuigan writes for Oklahoma Watchdog. (read full bio)