Alternatives To Medicaid Expansion Could Face Rocky Paths
Oklahomans will learn in the coming weeks whether Medicaid expansion supporters collected enough valid signatures to put the hotly debated question on the 2020 ballot.
But the proposal, which could provide subsided health coverage to more than 200,000 uninsured low-income adults, likely will not be the only plan up for debate.
Gov. Kevin Stitt pledged to outline a different path by year-end to address Oklahoma’s status as one of the unhealthiest states in the nation – and one with the country’s second highest rate of uninsured residents, at 14.2% in 2018.
The governor mentioned in a recent radio interview that his administration is looking at a federal block grant Medicaid model, but otherwise has remained tight-lipped on the plan.
Stitt opposes State Question 802, a proposed constitutional amendment to extend Medicaid eligibility to adults who make up to 138% of the federal poverty level, which is $17,236 a year for an individual.
But experts and policy advocates on all sides caution that there are few options outside of the traditional expansion model that can cover many people and avoid lawsuits and delays.
“Really the trend recently has been states seeking waivers to restrict access to benefits,” said Hannah Katch, a senior analyst with the Center on Budget and Policy Priorties, a left-leaning think tank based in Washington, D.C. “We now have some pretty good evidence that shows these type of waivers and restrictions really are more harmful than anything.”
Different Options, Difficult Issue
Oklahoma is one of 14 states that have not accepted increased federal funding to extend Medicaid eligibility under the Affordable Care Act.
But among the 36 states that have implemented the expansion, 13 have been granted or are seeking a federal waiver to make significant changes.
These include work requirements, eligibility and enrollment restrictions, changes to benefits and copays, and healthy behavior provisions for their expansion population, according to the Kaiser Family Foundation, which tracks state and federal health policies.
Robin Rudowitz, a Kaiser vice president, said it’s not unusual for governors and legislatures to look for changes to meet the specific needs of their states.
“There’s a common saying that if you’ve seen one (expansion) program, you have seen one program,” she said, “because within the current law, there is a good amount of flexibility how they deliver care.”
But Rudowitz said many proposals, often from states that were hesitant to embrace the Obama-era health care law, have hit snags in recent years.
One includes the federal government blocking a Utah plan earlier this year that would have adopted a partial Medicaid expansion by covering only those making up to 100% of the poverty level.
Another is Nebraska’s delaying implementation of its expansion after lawmakers sought changes to a voter-approved measure and several states facing legal challenges or reversing course on plans to condition Medicaid eligibility on work requirements.
A recent trend is the work requirements.
Seven states – Arizona, Arkansas, Indiana, Kentucky, Michigan, New Hampshire and Ohio – have either applied or won approval to require that enrollees in the expansion population work a certain number of hours each week to keep their eligibility. These are adults making up to 138% of the poverty level.
The proposal has largely come from Republican leaders who say it will incentivize employment and ensure that state and federal tax dollars go to those needing the program the most. The requirement has run into fierce blowback from Democrats and health advocates, who argue it will needlessly strip health care from thousands of needy residents.
No state is enforcing the work requirement yet as legal fights are pending in Arkansas – where almost 17,000 lost coverage under the rule before it was challenged – and New Hampshire. State leaders in Indiana and Arizona have paused their programs.
The work requirement could be attractive to Oklahoma’s policymakers, as state leaders already have proposed a Medicaid work requirement for the state’s current Medicaid program. The federal government is reviewing that waiver application.
Several states have experimented with alternative models of providing health insurance under the expansion.
Among the models are premium assistance that would use state and federal Medicaid dollars to buy private plans on the federal marketplace.
Some states, including Arkansas, Indiana and Arizona, have implemented this strategy hoping it would strengthen the private insurance markets, keep costs in check, and reduce any churn of residents shifting between Medicaid and private insurance as their financial situation fluctuates.
A study published in the Journal of the American Medical Association found no notable differences in utilization or quality-of-care outcomes between Kentucky, a state with a traditional Medicaid expansion, and Arkansas, which has the private option.
Oklahoma policymakers have already rejected a variation of the private option.
In 2016, Gov. Mary Fallin endorsed a plan to expand Medicaid – billed as the Medicaid Rebalancing Act – that would have used Medicaid fund dollars to buy private insurance for low-income adults otherwise eligible under traditional expansion programs.
The plan failed to win Republican support and died.
Other states have tried more outside-the-box approaches.
Nebraska is seeking federal approval for a two-tiered expansion plan that would make dental, vision and over-the-counter medication coverage contingent on wellness, personal responsibility and work requirements.
The proposal, which comes after Nebraskans approved a ballot measure to expand Medicaid in 2018, is expected to provide less than full coverage to a third of the expansion population.
Tiffany Milone, policy director for the Nebraska-based nonprofit OpenSky Policy Institute, said legislators’ decision to pursue an alternative to traditional Medicaid expansion has led to resistance and uncertainty.
“It hasn’t been very popular here,” she said. “Not only are we looking at a significant delay in implementation, but from what we know about the plan, I don’t see anything but increased administrative costs and extra burden on Medicaid enrollees and providers in the state.”
Some options proposed by Republican governors have drawn fire even from conservative groups.
Kaitlyn Finley, a research fellow with the Oklahoma Council of Public Affairs, a right-leaning free-market think tank that unsuccessfully tried to block State Question 802, said alternative expansion models backed by other GOP-led states fail to ease the group’s concerns.
“Frankly, everything we have seen has still been expensive,” she said. “And many of these alternative plans are even more expensive than traditional expansion.”
Block Grants and More
Stitt, however, could propose something different for Oklahoma.
The first-term governor’s statement to a conservative talk show, first reported by The Oklahoman, offers a rare glimpse into his thinking.
“The solution for Oklahoma is a block grant to bring more federal dollars into our state in a different way,” Stitt said on a KOKC radio show.
He may be weighing a model that Tennessee is exploring. It would transform the state’s current Medicaid program but might exclude an expansion component.
Tennessee, a non-expansion state, is proposing to receive its pre-budgeted “grant,” or some type of spending cap, instead of one where the federal government matches uncapped state spending determined by the needs of the program’s Medicaid enrollees.
The plan has been met with strong opposition from many groups that say the idea will restrict, rather than expand, health coverage.
If Stitt follows Tennessee’s path, Rudowitz, of the Kaiser Family Foundation, said Oklahoma could face similar roadblocks, including uncertainty over whether federal officials will approve the change or threatened legal action will stymie it.
“It’s all just a big unknown right now,” Rudowitz said.
Rudowitz didn’t rule out the possibility that Oklahoma policymakers, including Stitt, could come up with a new approach not yet tested in other states.
“I never pretend to I have all the right answers,” she said. “So maybe there is another interesting way out there.”
Reach reporter Trevor Brown at firstname.lastname@example.org.
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