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Should Oklahoma Reroute Public Health Funding To Pay For Medicaid Expansion?

One of two state questions on the general election ballot, State Question 814 would reroute public health funding to Medicaid expansion. Lenzy Krehbiel-Burton with Oklahoma Engaged explains the proposal and where the money would come from.


Earlier this year, Oklahoma voters approved Medicaid expansion, which will make about 200,000 more people eligible for government subsidized health insurance in 2021.

But now comes the $64,000 question: how to pay for it?

One potential option is State Question 814. As worded, it would amend the state constitution to change how much money goes to the Tobacco Endowment Settlement Trust, or TSET.

More than twenty years ago, Oklahoma was part of a multi-state settlement against the tobacco industry. As part of the terms, the state gets an annual payment as long as cigarettes are sold nationwide.

In 2000, Oklahomans voted to put most of its settlement money in a constitutional trust. Three-fourths of the payments go directly in the trust, where it generates interest. Those earnings are used to pay for public health programs and cancer research.

The remaining 25 percent of the annual payments go to the legislature and Office of the Attorney General to enforce the settlement terms.

State Question 814 would flip those percentages. Twenty-five percent would go to the settlement trust fund and 75 percent would go to the legislature to help cover the costs associated with Medicaid expansion, along with the Attorney General’s settlement enforcement costs.

State Senator Kim David is one of the measure’s authors, and in the past has supported legislation to include private insurance companies in the administration of Medicaid, and otherwise control spending on the program.

A study published in June by the Oklahoma Policy Institute pegged Oklahoma’s cost for Medicaid expansion to run at least $164 million. With a tight budget expected in 2021, the Majority Floor Leader says she is looking for every possible funding source to secure matching federal dollars with minimal cuts to other existing areas.

“We’re hoping we’ll get about $30-$50 million of new money coming into the state from the tobacco companies,” David said. “If we can use that to draw down federal funds, then that $50 million could turn around and be $150 million to help pay for Medicaid.”

Impact on health programs

Thomas Larson is the Director of Public Information and Outreach for TSET. If the state question does pass, it will not touch TSET’s $1 billion endowment. The agency will still offer programs like the Tobacco Quit Helpline and community wellness grants.

However, Larson does admit that the proposal could still impact some of TSET’s programs if it passes.

“When less money is going into the endowment year after year, it won’t grow as quickly,” Larson said. “SQ814, if it passes, would impact TSET’s ability to expand existing programs or stand up new programs to meet new health challenges. In times of a down economy like what we’re seeing now, there’s a chance that slowing down that inflow of money could impact current programs and we might have to cut back our budget.”

Although TSET can’t take a position on State Question 814, the American Cancer Society can and has. Among the programs that would potentially be impacted is a multi-year clinical trial research grant to the Stephenson Cancer Center in Oklahoma City.

Matt Glanville, the American Cancer Society’s government relations director for Oklahoma, says other Medicaid expansion funding sources should be looked at first, including implementing taxes on vaping products.

“What the legislature is asking Oklahoma voters is whether you want to sacrifice prevention to fund health care and whether you are willing to redirect cancer research and tobacco cessation monies to fund these programs, when they could do it through any number of other means,” Glanville said. “Those dollars are just too important.”

Oklahoma voters will decide State Question 814 on Nov. 3. Absentee ballot requests must be received by 5 p.m. on Oct. 27. Early in-person voting starts on Oct. 28.

Oklahoma Engaged is an election project by NPR member stations in Oklahoma supported by the Inasmuch Foundation, the Kirkpatrick Foundation and Oklahoma Humanities.

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