Oklahoma Governor Embraces Medicaid Block Grant Proposal

Published March 10, 2020

     “CMS (Centers for Medicare and Medicaid Services) and the Trump administration have been listening to the needs of states like Oklahoma,” Stitt said. “Thank you for putting health care back to where it belongs—with the states.”

      Lawmakers in Alaska, Georgia and Tennessee have expressed interest in Medicaid block grants, but Stitt has been the most visible cheerleader for such a plan as a way to rein in costs for a program originally designed as a health care safety net for disabled people of low income.

OK Medicaid at a Crossroads

What makes Oklahoma’s situation unique is that the Trump initiative coincides with a pending ballot measure in the Sooner State that, if approved by voters, would substantially expand Medicaid in its current form, in the state. Obamacare allows states to expand Medicaid, but Oklahoma has yet to do so. 

      Supporters of the ballot measure known as State Question 802 collected more than 313,000 signatures to have Medicaid expansion put on a statewide ballot. The plan, which would amend the state constitution, would cover about 200,000 people under the age of 65—about 5 percent of the state’s population—whose income doesn’t exceed 133 percent of the federal poverty level. Estimates of the proposed Medicaid expansion’s cost range from $150 million to $375 million per year.

        Stitt’s vision is an entirely different one. His proposal, called SoonerCare2.0, would move Medicaid recipients away from a “fee-for-service” model by adopting block-grant funding and requiring able-bodied Medicaid enrollees to work, attend school, or attend a certification program.  

     SoonerCare2.0 would also require enrollees to pay moderate premiums for health care. Stitt believes that adoption of State Question 802 will be too costly and that SoonerCare2.0 will better serve Oklahoma’s rural population, particularly in confronting the opioid crisis.

          No date has been set for voters to decide the fate of State Question 802. The decision lies with Gov. Stitt, and it may wind up on the ballot for the presidential election, this November. As for the fate of SoonerCare2.0, it could hinge on whether the courts rule that CMS has the legal authority to adopt a block-grant system.

Funding Medicaid Expansion

If State Question 802 is approved, and the courts reject the CMS block-grant plan, Oklahoma will be on the hook to fund its 10 percent share of an expanded Medicaid pool. The traditionally tax-averse state would have to look at budget cuts, tax increases, or fees on hospitals and other medical providers to cover the additional costs. Funding will be crucial because the proposed Medicaid expansion would go into effect no later than July 1, 2021.

     “If SQ 802 passes, our state agencies will experience deep cuts, because the ballot measure offers no mechanism to pay for it,” Stitt spokeswoman Baylee Lakey said in a statement.  “The governor does not support this unfunded mandate.”


Bonner R. Cohen, Ph.D., ([email protected]) is a senior fellow at the National Center for Public Policy Research and a senior policy analyst with the Committee for a Constructive Tomorrow.