Oklahoma pulls Medicaid block grant application

Dive Brief:

  • >Oklahoma has withdrawn its request to turn Medicaid into a block grant program, according to a letter the state’s Medicaid director sent to CMS this week. In April, it became the first state to submit a waiver asking CMS for permission to enact block grants in its Medicaid program under guidance the Trump administration released earlier this year.
  • Oklahoma voters narrowly approved Medicaid expansion this July, making it the 37th state to broaden the safety net program to a greater share of low-income residents and the first state to do so since the beginning of the COVID-19 pandemic, which has caused millions to lose coverage.
  • The two paragraph letter does not give a reason for the about-face. Oklahoma Medicaid officials did not immediately respond to a request for comment.

Dive Insight:

The Trump administration in January rolled out the plan to cap funding in Medicaid, dubbed “Healthy Adult Opportunity.” States can apply for permission to eschew the program’s traditional structure, where the federal government covers a percentage of a state’s Medicaid costs.

States can instead receive a fixed federal payment for all adults without disabilities who are covered under their state’s Medicaid expansion through the Affordable Care Act and be exempted from some of Medicaid’s requirements.

Oklahoma has been the only state to apply, meaning the withdrawal is a blow to the administration’s attempt to overhaul the program with block grants, long a conservative policy goal.

Oklahoma Gov. Kevin Stitt, a Republican, said in April the move was an avenue to migrate away from a fee-for-service model and toward value-based payments.

Stitt’s Medicaid expansion plan, called SoonerCare 2.0, would have applied capped funding to an estimated 220,000 adults with income less than 133% of the federal poverty level who would become newly eligible under the expansion.

As part of the plan, Stitt asked CMS for approval to expand Medicaid in March, in a bid to preempt State Question 802, a voter initiative to expand Medicaid without block grants or a work requirement program.

But that state question, which enshrines expansion in the state’s constitution, was approved by voters in June, and it’s unclear whether the ballot measure preempts the waiver.

Oklahoma’s now withdrawn request for a waiver included work requirements, a controversial program mandating most beneficiaries work, volunteer or attend school for at least 80 hours a month. Utah paused its work requirements this April due to the coronavirus pandemic.

When put to voters directly, Medicaid expansion continues to win at the ballot box. 

Missouri voters also narrowly approved Medicaid expansion this month, circumventing a GOP-led state legislature that has long been opposed to the measure and becoming the 38th state to expand the program.

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