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Capitol Correspondence - 03.17.20

Oklahoma Unveils Medicaid Block Grant Program

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The state of Oklahoma followed through on its commitment to be the first state to seek the Administration’s block grant waiver. In contrast, the state of Indiana, from which hail Vice President and former Governor Mike Pence and Centers for Medicare and Medicaid Administrator Seema Verma, announced that it would not seek the block grant waiver. ANCOR has been monitoring this issue because of the precedent it sets for using savings from one Medicaid program to bolster other Medicaid programs, and will keep members informed as states begin implementing the waivers. There will be opportunities for stakeholders to comment in each case, as the waivers come with a notice and comment period – though the comment process will be determined by individual states.

 As reported by Politico Pro:

“Oklahoma Republican Gov. Kevin Stitt has released a draft plan to block grant a portion of Medicaid, the first formal proposal issued by a state since the Trump administration earlier this year encouraged them to pursue the new conservative twist on the safety net program.

The draft waiver, issued shortly after Oklahoma took the first steps to expand Medicaid, would only apply to the poor adults in that population. The proposal includes a phased-in requirement that most adults work, volunteer or attend school.

In late January, CMS Administrator Seema Verma released a long-expected plan to let states convert portions of their Medicaid funding into capped federal payments, the administration’s boldest step to curb spending in the program. Democrats have blasted the move as cutting enrollment for the country’s most vulnerable, but Verma contends it puts Medicaid on a more fiscally sustainable path.

The plan from Stitt, who attended Verma’s block grant announcement in Washington, D.C., is competing with a ballot initiative that would add Medicaid expansion to the state’s constitution while effectively barring Republicans from making conservative changes to the program — such as adding requirements that people work or pay premiums.

Stitt already asked CMS to let the state expand Medicaid by July 1. He aims to implement the block grant plan no sooner than July 1, 2021.

The draft waiver is now out for a 30-day comment period in the state, kicking off the first step in a lengthy process. The state will need approval from CMS, and Medicaid advocates are likely to challenge the block grants in court, potentially entangling the policy in a yearslong legal battle.

The Oklahoma plan also requires some enrollees to pay premiums; eliminates retroactive coverage; implements delivery system reforms, such as integrating physical and behavioral health; and includes an $8 co-pay for using the ER when there isn’t an emergency.”