Interim Update from Dawn Watson

Health care once again will be at the forefront in the coming months with a state question and movement on managed care. Your OAFP legislative team will continue to monitor through the fall and keep you updated.

State Question 814 on the Nov. 3 ballot would change the allocation of future tobacco master settlement funds, which tobacco companies pay as a result of the lawsuit in the late 1990s. The question states that 75 percent of future payments would go to the legislature to pay for Medicaid rather than going into the Tobacco Settlement Endowment Trust. The remaining 25 percent would continue to go to the TSET corpus. The OAFP has supported TSET and its programs since the beginning. Points of note:

  • Proponents state that Medicaid continues to be a growing part of the state’s budget and the state should tap TSET funds to pay for Medicaid expansion.
  • Opponents to the question point out that the legislature has long avoided expanding Medicaid and should find a way to fund it without TSET funds. The legislature has a variety of funding options such as the Supplemental Hospital Offset Payment Program, tax options and repeal of deductions and tax credits. TSET funds would not pay the entire cost of expansion and funding for prevention programs should be left in place if improved health is really the goal.
  • TSET will continue to have programs funded through interest earned on the corpus but there will be less room for growth in its programs such as physician loan repayment through the Physician Manpower Training Commission and cancer research if the corpus doesn’t continue to grow. TSET funds have been vital to things such as Stephenson Cancer Institute achieving National Cancer Institute certification. Stephenson is one of only 71 sites in the country with the designation, which is up for renewal in 2023, and does clinical trials and cancer and tobacco research through TSET grants.
  • Tobacco master settlement payments will decrease over the years as cigarette sales decrease. In addition, once funds go into the state’s general revenue fund and are spent, they are gone, unlike when they go to TSET and earn interest for future health programs.
  • The state question does not specifically require that funds must go toward Medicaid expansion. Instead, it states that it must go toward Medicaid. Thus, the legislature could redirect funds currently going toward Medicaid and instead use TSET funds.
  • Oklahoma is one of few states that protected master settlement funds with a trust and continues to have steady access to funds for health programs.
  • A health care coalition has formed to oppose the state question. For more information about how you can help or make contributions, contact Matt Glanville with the American Cancer Society Cancer Action Network at glanville@cancer.org.

If you have more questions about TSET or the state question, please feel free to contact your OAFP legislative team. This article from The Oklahoman also has additional information.

The move toward managed care for the state’s Medicaid population is the other issue on the agenda through the fall. Gov. Stitt has directed the Oklahoma Health Care Authority to seek bids for privatized managed care for Medicaid.

  • The OHCA is scheduled to release the request for proposals in October and award the contract in January or February with health care plans starting in October 2021.
  • Many legislators are opposed, have voted down attempts the last several years and object to the hurried timeline that doesn’t allow for legislative input. The legislature would need to budget for the program, however, which is likely to be a controversial topic in the 2021 legislative session, starting in February.
  • Managed care could put federal funds connected to the Supplemental Hospital Offset Payment Program in jeopardy, according to some opponents.
  • Advocacy organizations continue to express concern with possible impacts on provider rates and patient services. The OAFP has worked with other organizations to object to managed care historically.
  • Proponents state that managed care has changed greatly since the 1990s and new models will result in money saved and better patient outcomes through more regular visits and preventative care.
  • More information: Oklahoman article, Oklahoma Policy Institute article, OHCA managed care page

Your OAFP team will be sure to keep you posted. In the meantime, if you have objections, continue to express them to your legislators.



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