The Oklahoma Legislature will raise hospital fees to fund Medicaid expansion

Oklahoma lawmakers have revealed detailed plans for funding Medicaid expansion that include raising fees on hospitals, frustrating health care officials who worry about financial instability as the state transitions to privatized Medicaid.

The Oklahoma Health Care Authority, which administers Medicaid, estimates the state will receive more than $1 billion in additional federal health care funding because of the pandemic. No new state funding is needed to cover expansion for at least the next two years, but lawmakers are still moving ahead with a plan to increase hospital fees.

Some Republicans, many who were displeased by hospitals that supported voter-mandated Medicaid expansion, believe the increased fees should start before the federal funds are used up, according to interviews and public debates. House and Senate Republicans say the state shouldn’t rely on one-time funds to pay for an ongoing expense, and any fees not needed to pay for expansion can be put into a savings account or used to cover unexpected costs.

Faced with a switch to privatized Medicaid this fall, hospitals had pushed for the state to only use federal dollars to fund the first years of expansion. They had hoped increased hospital fees would come later so providers could settle into the new privatized system and financially recover from the pandemic.

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