“I’ve looked, along with my caucus, at options to be able to try to do some kind of controlled expansion where you have a lot more flexibility,” Treat said. “The Healthy Adult Opportunity is the first time I’ve seen where the administration has really embraced concepts that allow more flexibility.”
As the ballot measure was gaining support, Stitt and federal Medicaid officials began talking late last year about the block grant plan, which Verma had been developing for months at that point — and came as Stitt was growing more comfortable with the idea of adding people to the Medicaid rolls, said Carter Kimble, Oklahoma’s deputy secretary of health and mental health.
“The more and more we learned about it, I think the more and more it appealed to the governor’s business sense,” Kimble said.
Verma is selling the plan as giving governors what they’ve been asking for: “The administration is offering states the upfront flexibility to design a program that works for their state’s unique needs, rather than being constrained by top-down dictates from Washington,” she wrote in a Washington Post op-ed.
Stitt earlier this month took the first steps toward Medicaid expansion, asking the Trump administration for permission to broaden the program by this summer. Review of the block grant plan will happen later.
Supporters of the ballot question suspect that maneuver was meant to dampen voter enthusiasm for their measure, though Stitt’s office says it will help the state better prepare for his plan and bring federal cash to the state’s hospitals sooner.
Earlier this week, not long after Stitt received national backlash for encouraging people to dine out as health experts were urgently warning people to avoid crowds, his Medicaid agency posted the formal block grant proposal.
It would initially start as per-person payments based on program enrollment, rather than a lump sum block grant, as the state gathers data on new enrollees. The state hopes to switch to a block grant in two years. It’s now accepting public feedback over a 30-day period before it can submit the proposal to the federal government.
Opponents of his plan have urged him to call it back while the nation addresses the pandemic. “Oklahomans have countless issues to address during this national health crisis; fighting for health care coverage should not be one of those issues,” said Ahniwake Rose, executive director of the left-leaning Oklahoma Policy Institute.
Stitt said there’s no reason to delay, since state health officials are accepting comments on the plan online, by phone and mail. “A global health crisis is exactly the time we should be seeking to expand coverage for Oklahomans,” he said in a statement, though his administration has already asked CMS to expand Medicaid while it works on the block grant plan.
States hedging their bets
Other red states are taking notice of Oklahoma’s plan. But none are rushing in just yet.
Tennessee, which hasn’t expanded Medicaid, last fall submitted to Trump a proposal to block-grant much of its Medicaid program, which Verma has indicated won’t pass muster under the narrower guidelines put out this year.
Arkansas, at the forefront of Medicaid expansion experiments the past decade, has a state law requiring it to pursue a block grant once the federal government authorizes them. Republican Gov. Asa Hutchinson has been noncommittal on whether the state would pursue Trump’s offer.
“We’ve talked to the Trump administration on their guidelines for a block grant, and we’re seeing how we can uniquely make that work in Arkansas,” Hutchinson told POLITICO last month. “It’s a work in progress, it’s a big lift — but it’s something the states have asked for, and something I’ve asked for.”
Even states supportive of the idea likely will want to take their time studying it. But there are also political considerations.
The block grant offer would certainly be wiped away if Joe Biden or Bernie Sanders is elected president this fall. Also, Medicaid advocates are expected to challenge Oklahoma’s plan in court if it’s approved by the Trump administration, potentially entangling it in legal battles for years to come.
Another one of Trump’s major Medicaid initiatives, the program’s first-ever work requirements, has stalled after courts found the administration didn’t have the authority to mandate that some enrollees work or volunteer to keep their coverage. Block grant critics say that Trump similarly doesn’t have the authority to unilaterally rewrite the rules for Medicaid financing.
But if Trump gets a second term, he can continue his conservative transformation of the judiciary, increasing the odds that the courts, which have become more conservative with Trump appointees, may ultimately bless his Medicaid overhaul.
In Missouri, Medicaid advocates are close to securing enough signatures to put Medicaid expansion on the ballot this year. Republican Gov. Mike Parson, who’s running for reelection and opposes Medicaid expansion, said he likes block grants but is waiting for the outcome of the ballot measure.
In Kansas, Trump’s block grant announcement didn’t scramble a bipartisan deal to expand Medicaid reached weeks earlier, much to the surprise of the state’s Democratic governor.
“When I saw that was coming out, I thought, ‘Oh this is going to throw a monkey wrench in here’ — but no,” Gov. Laura Kelly told POLITICO. Instead, expansion has been held up over an unrelated anti-abortion measure.
The rural hospital effect
A key driving force behind Medicaid expansion in Oklahoma and other conservative states that have pursued expansion has been the struggles of rural hospitals.
Richard Gillespie knows about those all too well. More than three years ago, the 18-bed rural hospital he runs was in dire straits. The equipment at Jefferson County Hospital was antiquated. Doctors were in short supply, and admissions were declining.
Gillespie already told one board member the hospital, the last in the town of 1,934 people, would need to close. Then a deal came through: a larger system 30 minutes away, Duncan Regional Hospital, was willing to lease it.
“I thought I was going to cry, literally,” Gillespie recalled, as he sat next to Jay Johnson, Duncan’s president and CEO.
The facility now has new equipment and more patients — and sports a “Keep Rural Hospitals Open” sign on its front door in support of the ballot initiative. But other rural hospitals haven’t been so fortunate. In addition to the six that have closed in Oklahoma since 2016, another eight have declared bankruptcy. Even a larger rural hospital like Duncan — the county’s second-largest employer and so much a fixture in the community that residents eat in its cafe after church on Sunday — has thin operating margins that make it difficult to grow and provide more care.
State Rep. Marcus McEntire, whose district includes both Duncan and Jefferson hospitals, was the rare Oklahoma Republican to support Medicaid expansion when he ran for office in 2016.
“We’ve had six or seven [hospitals] close — not saying that that’s all because we haven’t expanded Medicaid … but I am saying that it would have helped,” said McEntire, who helped lead a bipartisan health care task force that discussed Medicaid expansion in the legislature.
Many of the state’s uninsured also turn to the state’s robust community health center network, which cares for 250,000 patients per year. Roughly 28 percent of them don’t have health coverage.
“When you’re sitting at the dead last outcomes in the country, practically, you kind of have to say, ‘Gee, what are other states doing?’ and then steal some of those best ideas and put them together the way you’ll think they’ll work in Oklahoma,” said Lou Carmichael, CEO of Variety Care, which operates 14 clinics.
Medicaid expansion supporters said there’s been a noticeable shift in the state’s attitude toward the program.
“I’ve seen us go from, ‘Oh, hell no,’ to by the end of last year’s legislative session, I think the question was not, ‘Should we expand Medicaid,’ but ‘How will we expand Medicaid?’” said Carly Putnam, policy director of the Oklahoma Policy Institute.
The feeling isn’t universal. The conservative Oklahoma Council of Public Affairs, which lost a lawsuit to strike the Medicaid expansion ballot question, contends the program won’t make a dent in the state’s underlying health problems, like high obesity rates and physical inactivity.
“Medicaid expansion is not going to solve [that],” said Jonathan Small, the group’s president.