Stitt has redeemed himself this week with a veto of SB 1046, an increase in hospital fees designed to raise $134 million bucks to expand Medicaid in the state. This bill was about 80% of the funding needed to implement the expansion of Medicaid in Oklahoma.
Stitt had previously filed a state plan and a wavier with the feds to expand Medicaid, a program that Stitt calls Sooner Care 2.0. What changed? The corona virus pandemic and the oil price crash happened. Prior to that Oklahoma unemployment was just over 3%, now it might hit 14%, increasing the number of enrolled Medicaid and vastly expanding those that are eligible to enroll. And the bill partially funded the expansion for only one year and from one time funds that won't be there next year.
The state still faces SQ 802 on the June 30th primary ballot, which is the petition to expand Medicaid in the state.
Naturally the legislators had their panties in a wad over the veto and their hard work/corporate welfare plan going down the drain. In their mind they funded the mess and paid off some campaign donation I.O.U.s. They also passed SB 1935 that transferred millions of dollars from the Revenue Stabilization Fund (rainy day fund), basically paying for the expanded Medicaid out of our savings account....
And strangely enough, Stitt signed SB 1935 despite it also coming out of one time funds.
Why does the Senate and House want to expand Medicaid? To pay off a major wing of the Chamber of Commerce, the hospital lobby. Years back the SHOPP program was passed, Supplemental Hospital Offset Payment Program, a scheme where the hospitals “tax” themselves in order to raise the money to trigger increased federal spending. They “tax” themselves 10% and the feds kick in 90%. But there is a problem, most of the rural hospitals are exempt from the tax, meaning the urban hospital patients basically provide a free ride for the rural patients. The money goes to fund the state portion of Medicaid and the Sooner Care program.
Around 40 rural hospitals are exempt from the tax, as well as state and federal hospitals, tribal hospitals, specialty hospitals, children's hospitals, and long term care hospitals. The urban hospitals that are left paying the tax are the hardest hit in the pandemic plus the financial strain caused by the shut down of elective surgery from the corona virus pandemic.
Of course the hospitals pay zero tax. Patients and insurance companies pay the tax.
The legislature adjourned on Friday after over riding a handful of the vetoed bills but they didn't override SB 1046. If the State Question passes the funding stream will have to be reconsidered in the next session.
Expanding entitlements is insane. Right now the feds pick up 90% of the cost by printing more money and raising inflation even higher. But what is going to happen once someone with some common sense takes charge and ends the federal deficit spending? Oklahoma will have hundreds of thousands of people on entitlements that will need to be funded by raising taxes.
If you really want to deal with the cost of care, focus on why care is high, force people to have skin in the game, force the medical companies to actually compete on price and service, to publish their prices like the rest of society's businesses are forced to do in order to attract customers.
