Oklahoma Takes First Steps Toward Block Grant-Focused Medicaid Expansion

On March 6, 2020, Oklahoma GOP Gov. Kevin Stitt took the first step toward expanding the state’s Medicaid program, as the state seeks to be one of the first to restructure how it receives its federal funding into a block grant.

On Jan. 30, Stitt joined CMS officials in Washington to express his support for new guidance that would allow states to apply for capped funding for Medicaid in exchange for added flexibilities.

The Oklahoma Health Care Authority followed up Friday by submitting a state plan amendment ​​​to the Centers for Medicare and Medicaid Services for approval. If approved, the state could broaden coverage as early as July. To qualify under an expansion, a family of four would have to earn less than $34,846 per year.

Under the 2010 health law, states can increase Medicaid coverage up to 138 percent of the federal poverty level, with the federal government picking up about 90 percent of the total cost. In Oklahoma, the federal government would contribute about $1.1 billion per year while the state would provide $150 million annually. State lawmakers have still not come to an agreement on how to fund their share. Oklahoma, thus far, is one of just 14 states that have yet to adopt expansion.

The Oklahoma amendment would expand coverage to about 220,000 individuals ages 19-64 who are eligible due to income. If approved by CMS, it would put the state one step closer to Stitt’s goal of creating an adapted version of its Medicaid program, with capped federal funding, known as SoonerCare 2.0. 

Oklahoma is first seeking to expand so that the state can get more federal money. Non-expansion states under the federal guidance would not be eligible for their funding to be based on the higher match rate given to expansion states.

Last month, Stitt told reporters the state would be pursuing expansion, despite his previous opposition. He added that the state’s proposal for capped funding would also seek to include work requirements, premiums and expanded treatment for substance use disorders.