OKLAHOMA CITY — Oklahoma Gov. Kevin Stitt’s administration is scrapping a plan to expand Medicaid on July 1, citing a lack of state funding.

The state’s Medicaid Director Melody Anthony notified the U.S. Department of Health and Human Services in a letter Thursday that the state was withdrawing its proposal.

The Stitt administration pushed for the expansion in March, but after the Legislature narrowly passed bills to help pay for the state’s share, including one that increased a fee that hospitals pay, Stitt vetoed them.

Stitt said in his veto message that while he appreciated the Legislature’s willingness to help fund his expansion plan, he worried that the rising unemployment rate would dramatically increase the number of people who qualified for Medicaid.

The governor is still pursuing a block-grant-style Medicaid expansion offered by the Trump administration, dubbed the Healthy Adult Opportunity waiver, that would give states more control over Medicaid in exchange for a limit on how much the federal government kicks in. But that proposal wouldn’t take effect until 2021.

Meanwhile, Oklahoma voters will decide on June 30 whether to fully expand Medicaid when they vote on State Question 802. That proposal, if approved, would also take effect next year and would supersede the governor’s plan.

A Medicaid expansion would extend health insurance to low-income adults who earn up to 133% of the federal poverty level, or $16,970 for an individual and $34,846 for a family of four. The Oklahoma Health Care Authority, the state’s Medicaid agency, initially estimated about 220,000 Oklahomans would immediately qualify, at a total cost of about $1.24 billion annually. The federal government would cover about $1.1 billion in annual costs with the state responsible for about $150 million each year.

But with skyrocketing unemployment in Oklahoma as a result of crashing energy prices and an economic slowdown due to the coronavirus pandemic, the number of people who qualify for Medicaid, and the cost of the program, could be much higher.

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