Gubernatorial Candidates Face State's Medicaid Dilemma

Article excerpt

Although Oklahoma's Medicaid program hasn't received much attention from candidates so far this election season, it remains "the 800-pound gorilla" of state politics, according to gubernatorial candidate Steve Largent, R-Tulsa.

The program, which provides health care coverage to the poor and is funded through state-federal matching funds, has seen enrollment surge and expenses balloon, with that trend expected to continue or even accelerate in the next decade.

As a result, the next governor may face some tough choices when it comes to financing the program.

In the last year alone, Oklahoma's Medicaid enrollment grew 6.1 percent, rising from 443,926 in July 2001 to 471,110 in July 2002. That means 13.7 percent of Oklahoma's total population is now covered through the program.

The growth has been even more dramatic since 1997, when lawmakers changed eligibility standards for portions of Medicaid to allow Oklahomans earning up to 185 percent of the poverty level ($33,485 annually for a family of four) to receive Medicaid coverage. In July 1997, an estimated 282,000 people were enrolled in the program, compared to 471,110 today -- an increase of 67.1 percent in a five- year period.

State spending has surged along with enrollment. In fiscal year 1997, state dollars appropriated to Medicaid totaled $338.3 million (or 8.2 percent of total state spending). By fiscal year 2002, the total state appropriation hit $576.5 million (a 70 percent increase in five years and 10.7 percent of total state spending in the fiscal year ended June 30).

In spite of increased appropriations, the Medicaid program experiences a shortfall almost every year and lawmakers normally bail it out with supplemental appropriations. However, that solution may not be available next year due to lower-than-expected tax collections.

The Legislature was able to increase state spending last year and maintain Medicaid funding, but only because lawmakers were able to drain the "rainy day" fund, tapping all but $70 million of the $340 million in the fund.

Lawmakers may not have that luxury next year, and could be forced to consider major reform of government services. Altering Oklahoma's approach to the Medicaid program may be part of that effort, with policy-makers seeking to control costs while still providing coverage to the most needy.

The reforms suggested by the gubernatorial candidates interviewed by The Journal Record cover everything from shifting power and responsibility to patients, to simply increasing state spending.

Steve Largent

Perhaps the most dramatic reforms discussed were those proposed by former Congressman Steve Largent.

The Republican front-runner said he is concerned that the current system is actually limiting the medical options available to the poor in spite of increased eligibility.

"We're a mile wide and an inch deep," he said.

The state has expanded eligibility for some portions of the Medicaid program from 133 percent of the federal poverty level to 185 percent. But as eligibility expands and enrollment grows, the state finds it more difficult to actually provide promised benefits, Largent said.

"We've tried to stretch essentially the same dollar over a broader group of people, and so as a result of that we end up cutting the reimbursement rate to doctors and hospitals," he said.

Largent said Oklahoma's Medicaid enrollment growth, in percentage terms, was the largest in the United States from 1997 to 1999.

As Medicaid reimbursement rates have fallen so has the participation of doctors, and Largent said Oklahoma has one of the worst doctor participation rates in the nation, ranking in the bottom three states.

"In what was a good-intentioned effort of allowing more access to health care, we've actually created a system where we've decreased access because of the low reimbursement rate and doctors dropping out of the plan," he said. …