Gov. Fallin: Oklahoma will not join health exchange or Medicaid expansion

OKLAHOMA CITY, November 19 – Gov. Mary Fallin slapped the feds today, announcing the Sooner State will not create a state-based health insurance “exchange” – while reserving final determination of Medicaid eligibility for citizens referred from a likely federal exchange.

Exercising an “opt-out” allowed in last summer’s U.S. Supreme Court decision, Gov. Fallin told reporters the state will not expand Medicaid coverage according to ACA guidelines, while restating support for a state lawsuit against the federal law, which is still pending judicial review.

In response to questions from CapitolBeatOK, Gov. Fallin said Sooner State lawmakers will consider changes to “Insure Oklahoma,” a state-run Medicaid-funded program which assists the working poor with access to private insurance.

Under ACA, states were required to tell federal officials, by last week, whether a state-based exchange will be created. If not, a federally-managed exchange is created under the controversial law. Although the deadline was extended to mid-December, Fallin decided to announce she won’t go along, in a letter to Health and Human Services Secretary Kathleen Sebelius — the federal official guiding implementation of President Barack Obama’s 2010 legislation frequently called “ObamaCare.” 

Fallin’s letter said “it would be irresponsible of me to commit our state to the development of an insurance exchange based on the information provided” by the U.S. government. “Our state will not establish a transitional reinsurance program as outlined in PPACA.” She believes “viable market-based solutions” can facilitate “greater access to health insurance coverage in Oklahoma.”

Fallin pointed to a lawsuit in which Oklahoma Attorney General Scott Pruitt contends IRS rules taxing businesses conflict with the ACA’s provisions and violate the federal Administrative Procedures Act. That case is pending in federal district court in Muskogee.

Republican leaders of the state Legislature quickly backed Fallin’s decision, along with the head of the Oklahoma Council of Public Affairs, the state’s leading free-market think tank. 

However, David Blatt of the Oklahoma Policy Institute, a progressive public policy research group, decried Fallin’s comments, saying the decision not to expand Medicaid “is deeply troubling and unfortunate, putting politics over the interests of Oklahomans. We are missing a vital opportunity to improve the health of our citizens, bolster the financial situation of our health care providers, and strengthen our state economy.”

Blatt contends 150,000 low-income and uninsured Oklahomans will be in a “coverage crater” – earning too little to qualify for tax-subsidized coverage aimed at individuals earning 100-400 percent of the poverty level.  

Blatt asserted Medicaid expansion “is a very favorable deal for Oklahoma,” with federal provisions to use tax money to cover 100 percent of the first three years, and thereafter 90 percent. Blatt expressed hope Fallin will reconsider her decision. 

Fallin said she and Republican legislative leaders want to “increase quality and access to health care, contain costs, and do so without placing an undue burden on taxpayers.” She said a choice between a state exchange or a federal-run program “has been forced … 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.” 

In addition to opposing a state exchange, Fallin said Medicaid expansion is “unaffordable, costing the state of Oklahoma up to $475 million between now and 2020, with escalating annual expenses in subsequent years.”

Relying on the federal dollars would increase dependence on a cash stream “that may or may not be available in the future given the dire fiscal problems facing the federal government,” Fallin said. “On a state level, massive new costs associated with Medicaid expansion would require cuts to important government priorities such as education and public safety.”

Michael Carnuccio, president of OCPA, said Fallin handled the controversy  “wisely.” He said rejection “of fleeting federal dollars to expand Medicaid … 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.”

Carnuccio’s group projects Medicaid expansion would cost taxpayers a total of $6.5 billion by 2023 – nearly equal to the current state-appropriated budget. 

State Rep. T.W. Shannon of Lawton, House Speaker-elect, said Medicaid “is already unsustainable and needs to be reformed at the state level with solutions that reflect our unique challenges.” He continued, “It is important to understand that even if we were to create an exchange, the rules are written in Washington, D.C. and the exchanges are going to be controlled by the federal government.” 
The Republican leader contended expansion of Medicaid would “create a massive new bureaucracy and would enable new federal taxes on our employers.” 
Much the same message came from Senate President Pro Temp Brian Bingman of Sapulpa. He said Oklahomans “simply do not want anything to do with Obamacare.” A state-run exchange “compliant with the federal law,” would, said, “be ‘state-run’ in name only.”

Bingman expressed “Reagan-esque skepticism” about implementation of the new law. He asserted it is not enough simply to reject “ObamaCare,” promising support for Medicaid reforms “to deliver affordable coverage to every Oklahoman regardless of individual circumstances.”

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