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Oklahoma Eyes Obamacare Funds, But Without Medicaid Expansion

Crashing oil revenue has the state rethinking federal health-care aid.
An Obamacare sign is seen on the UniVista Insurance company office on Dec. 15, 2015, in Miami.
Photographer: Joe Raedle/Getty Images

Dwight Sublett has seen a lot of busts in his 33 years as a pediatrician in Stillwater, Oklahoma, but this year ranks among the worst. With oil hovering at $35 a barrel, the state is facing a $1.3 billion budget shortfall for the fiscal year starting on July 1. On March 29 the Oklahoma Health Care Authority warned it would have to cut 25 percent from reimbursements to physicians, hospitals, and other medical providers under the state’s Medicaid program, SoonerCare. The program covers a million poor Oklahomans each year, more than a quarter of the state’s population. “For the rural physicians, this is going to be a devastating blow,” Sublett says.

Across the country, Medicaid covers 71 million low-income Americans. Medicaid is jointly funded by the federal government and states, and it typically accounts for 20 percent to 35 percent of a state’s annual budget. The crash in oil prices has made it harder for energy-dependent states to come up with their share. “These states that have had fairly stable budgets—Oklahoma would be the classic example—suddenly they’re running really big deficits,” says Gregory Hagood, senior managing director of Solic Capital, an investment and advisory firm that works with hospitals in financial distress.