Fallin outta love with Obamacare

By Patrick B. McGuigan | CapitolBeatOK

OKLAHOMA CITY – Expansion of Medicaid coverage under the Affordable Care Act (ACA) will either result in long-term savings worth millions to Oklahoma taxpayers, or will cost state taxpayers an additional $11.4 billion.

While the experts disagree, history says you can bet President Barack Obama’s Affordable Care Act will become more expensive than anyone predicts.

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,” said Jonathan Small of the Oklahoma Council of Public Affairs, a free market think tank.

Not so fast, said David Blatt of the progressive Oklahoma Policy Institute in Tulsa. He argued revenue hikes and cost savings will offset increased government expenditures on health.

“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 for playoff games,” Blatt said.

Confused? Even 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 told CapitolBeatOK.

Recent state history suggests that government health programs tend to become more expensive.

Oklahoma’s 2001 Medicaid spending totaled $2 billion, of which the state contributed about $495.5 million. Last year, that program ran $4.4 billion, of which the state contributed nearly $1.3 billion. Health care is now the state’s top budget expense, ahead of No. 2 education. Even in the pre-Obamacare era, Oklahoma relied on federal stimulus dollars to cover some Medicaid costs.

Mike Fogarty, CEO of the Oklahoma Health Care Authority (OHCA), said increased costs for taxpayers will be offset through better personal health for newly insured individuals, reductions in the number of uninsured hospital payments, and state government savings through Medicaid expansion that “could be matched federally.”

OHCA rated well in a 2011 assessment of Medicaid error rates, and Fogarty contends administrative costs are low compared to other states.

“Relative to potential benefits gained,” said agency spokesman Carter Kimble, “the state’s investment is minimal.”

In 2011, after working on a health exchange required under the ACA, Gov. Mary Fallin reversed field and was among the first governors to defy the mandate. After the Supreme Court upheld law, Fallin saw no hurry to address the issue. A spokesman for the governor said she’ll decide on Medicaid policy after November’s election, and will listen to “all the stakeholders.”

The state Legislature has its own wait-and-see approach. The House-Senate Joint Committee on Federal Health Care Law studied the issue, but took no action. Now, lawmakers aren’t even offering the pretense of an interim study that would offer a plausible excuse for delay.

Contact Patrick B. McGuigan at Patrick@capitolbeatok.com and follow us on Twitter: @capitolbeatok.