Update on the Oklahoma Medicaid Block Grant

By Maddie Mason, Senior Associate, Policy

Earlier this year, the Centers for Medicare and Medicaid Services (CMS) released a plan that would allow states to implement block grants for their Medicaid programs, specifically, for adults that gained Medicaid coverage through the Affordable Care Act’s (ACA’s) Medicaid Expansion. CMS branded this program as a “Healthy Adult Opportunity” (HAO), and they are using their waiver authority to offer this program to states without the weigh-in of the general public.

Federal funding for states Medicaid programs is currently based on need and services delivered, but under this new program states can restructure how their Medicaid benefits are delivered. The block grant proposal means states would receive a capped amount of federal funding and in exchange they would be allowed more flexibility to reduce benefits, exclude coverage for certain drugs, and impose premiums and cost-sharing on people accessing Medicaid benefits. People with disabilities and chronic conditions that rely on Medicaid would be at risk under a block grant because states would be incentivized to limit services and eligibility. The National Health Council (NHC) and other advocates have requested that CMS withdraw this waiver option. We are even more concerned in light of the recent COVID-19 pandemic that has significantly increased demand for Medicaid services and the economic downturn that will result in less state revenue to pay for the increased demand.

On April 20, Oklahoma Governor Kevin Stitt submitted a plan to CMS, making Oklahoma the first state to apply for the proposal. If the Administration accepts the proposal, it could go into effect in July 2021, and would lay the foundation for other states to follow.

If this waiver is to be approved, it would be a phased in and would:

• Require that most adults work, volunteer, or attend school;
• Make certain enrollees pay premiums;
• Eliminate retroactive coverage;
• Implement delivery reforms; and
• Enforce an $8 co-pay for using the ER for a situation deemed not an emergency.

The NHC is concerned that this proposal will have many negative implications on the disability and chronic disease communities, and therefore, we will continue to advocate against such proposals. For more information, visit our Health Care Reform issue page.