Tuesday, March 23, 2010

Federal Healthcare Bill Could Mean Tax Increase Or Reduced Services For Oklahomans
Federal Healthcare legislation signed into law by President Barack Obama today places an enormous unfunded mandate on Oklahoma, the chairman of the House Human Services Committee said today.

Rep. Ron Peters (left) said that, even before the national recession, states, including Oklahoma, were having a difficult time keeping up with the federal demand for matching funds related to Medicaid. Since the recession, with tax revenues down, funding Medicaid—even before the expansion called for in this new health legislation—was going to be difficult.
This task will become exponentially harder in December of 2012 when the federal stimulus funds that have been used to help states weather the recession are no longer available. In Oklahoma, the health care stimulus dollars will have to be replaced beginning in FY12 or risk having a substantially smaller program that either serves fewer persons or rations coverage.
If the state replaces all of the federal stimulus funds used related to health and human services, this would total over a billion dollars and this is before the expansion of coverage mandated in the new federal health care legislation.
“We have been concerned about runaway Medicaid expenditures for years, even before this unprecedented expansion of federal health care was enacted,” said Peters, R-Tulsa. “With these new federal mandates, I don’t see how our state will be able to sustain ongoing and increased funding requirements without either cutting services or raising taxes.”
Under the federal health bill, Oklahoma will be required to provide Medicaid coverage to a much larger group of persons than now beginning in 2014, though this will initially be paid using federal funds.
This will change in 2016 when the state will have come up with the state match of 10 percent on these new federal Medicaid funds and any more federal funds that the new requirement obligates the states to match as more persons become eligible for coverage in the future.
Recent occurrences point out the problem with such a policy. First, the state in FY-10 had to consider reducing doctor and provider reimbursement rates because of the state budget shortfall. This possibility still exists as lawmakers put together the FY-11 budget.
Second, as the state grapples with the financial problems of the recession and begins to struggle with filling the current federal Medicaid stimulus funds hole, the likely targets for replacing such funds will have to be areas with significant funding like education, roads, and corrections.
“Oklahoma’s struggles with Medicaid funding are not new, and will only be exacerbated by this new law,” said Peters. I had hoped we would be able to tackle this looming funding issue locally, but instead Washington is imposing a federal health care plan on our state that our people don’t want and we can’t afford.
“Our Democratic president and Democratically-controlled Congress have ignored the pleas of states across the country who cannot afford this unfunded mandate in good economic times, let alone during a recession,” Peters concluded.