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The Roundup

Obamacare in Oklahoma

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Posted 07.03.12

The media coverage of the U.S. Supreme Court’s decision to uphold President Barack Obama’s Affordable Care Act has been nonstop, as people struggle to understand what the new law means and how it will impact their particular situations.

SCOTUS decided the law was constitutional because it acts as a tax, and the federal government is allowed to levy taxes. However, the predominant question regarding the law’s implementation concerns the expansion of Medicaid.

From the Tulsa World:

Last week, the U.S. Supreme Court ruled that the Affordable Care Act’s individual mandate does not violate the U.S. Constitution, but the high court also found that Congress cannot penalize states that refuse to go along with the law’s plan to expand Medicaid to cover adults up to 133 percent of the poverty level.

Florida Gov. Rick Scott has already announced he won’t implement Obamacare, either through the creation of a health care exchange or through the expansion of Medicaid, because “he believes it is bad policy and too costly.” South Carolina and Louisiana have also promised to “opt out” of the ACA.

According to the World, Oklahoma Gov. Mary Fallin hasn’t decided yet whether to accept additional federal funding for Medicaid—funding that would allow 200,000 uninsured Oklahomans to receive Medicaid coverage but would also require an $11.4 billioninvestment from the state, paid out over the course of 10 years, according to the conservative think tank Oklahoma Council of Public Affairs.

States where the uninsured live, courtesy The Atlantic Cities.

Oklahoma has the seventh highest number of uninsured citizens—18.9 percent of the population—and ranked eighth on 24/7 Wall St.’s list of “states dying for health coverage.” Our life expectancy—75.6 years—is the fifth lowest in the nation, and 12 out of every 100,000 deaths are related to a lack of health insurance. From 24/7 Wall St.:

It can hardly be said that Oklahomans are healthy. Among all states, Oklahoma has the third-highest percentage of adults who smoke, the sixth-highest rate of heart disease death, the seventh-highest obesity rate and a lower proportion of adults who consume fruit twice a day than any other state. Making matters worse, Oklahoma spends just over $6,500 per capita on health care — one of the lowest amounts in the United States. Relatively few residents have employer-based health coverage, and many residents cannot otherwise afford private insurance because the median household income in the state is just $42,072 — one of the lowest figures in the country.

According to The Washington Post, Oklahoma ranks ninth on a list of 10 states that will benefit most from the expansion of Medicaid. The number of uninsured adults in the state earning less than 133 percent of the poverty line is expected to decrease by 53.1 percent under the ACA.

Courtesy The Washington Post.

According to the Oklahoma Policy Institute, the choice “should be simple.”

Under the Affordable Care Act, the federal government will pick up the bulk of the tab for expanding Medicaid … it will cover 91.7 percent of the cost of providing health insurance to between 137,000 and 180,000 Oklahomans between 2014 and 2020, according to the Oklahoma Health Care Authority’s estimates. While the state would assume a small portion of the cost for this population, these costs would be at least partly offset by state savings associated with serving a smaller indigent population.

But the OCPA’s argument against accepting the federal money is that you can’t believe the government when it says it’s going to fund something. Jonathan Small, fiscal policy director for the Oklahoma Council of Public Affairs, told the Tulsa World: “The promises from the federal government about how much programs are going to save and about how little they’re going to cost, they’re always wrong.”

OK Policy says rejecting the funds would hurt “the very Oklahomans who are struggling the most: primarily working-poor parents and other adults who work for low wages and are either not offered employer-based coverage or can’t afford it.”

Right now, if you have children but earn more than $7,000 a year (for a family of three), you make too much money to qualify for Medicaid in Oklahoma.  And if you don’t have kids, you can’t qualify for Medicaid at all, no matter how little money you make.

Without the expansion of Medicaid, those people would not be eligible to participate in the health care exchange, because “the Affordable Care Act assumes that adults with incomes below the poverty line will enroll in Medicaid so it does not make this population eligible for tax credits to purchase coverage in the new state health insurance marketplaces.” From OK Policy:

Even if Oklahoma chooses not to expand Medicaid to cover its own low-income uninsured, Oklahoma taxpayers will be funding the federal share of Medicaid costs in other states that choose to participate. It would be hard to explain why Oklahomans are paying for health insurance coverage for low-income New Mexicans and Oregonians but not for low-income Oklahomans. And it would be ever harder to explain that Oklahoma legislators are receiving publicly-funded health insurance at taxpayer’s expense yet denying coverage to their poorest constituents.

As much as some Oklahoma politicians may be tempted to adopt an uncompromising oppositional stance towards the Affordable Care Act, leaving the lowest-income adult population out in the cold by turning down the enhanced federal match would be contrary to the state’s interests and lacking in basic compassion and common sense.

Oklahoma’s insurance commissioner, John Doak, is “disappointed” with the SCOTUS decision and said, according to CapitolBeatOK, “potential legal challenges remain, namely on the issues of religious freedom and navigators.”

“[The Court]’s ruling gives the federal government wide-ranging powers it has never had before,” said Doak. “Not only is it a federal overreach into citizens’ lives, but it is also the largest tax increase on the middle class in American history. Taxpayers can’t afford this ill-conceived law and they deserve a full repeal.”

But as The Washington Post pointed out, ACA is actually not the “largest tax increase on the middle class in American history.” It’s not the largest tax hike period, and it also increases taxes more on high earners than it does the middle class.

Courtesy The Washington Post.

From WaPo:

So no, the Affordable Care Act isn’t the “biggest tax hike in history.” It’s not even the biggest tax hike in the past 60 years. Or 50 years. Or 30 years. Or 20 years.

But it does include a number of tax hikes. The individual mandate, however, isn’t one of the big ones. It’s only expected to raise $27 billion during the next decade. The largest tax increase in the law is on high earners, who will see their Medicare payroll taxes increase by 0.9 percentage point and who will also pay a slightly higher rate on investment income.

Holly Wall, News Editor