Last year Oklahoma’s Medicaid program cost taxpayers $5.47 billion, according to the Oklahoma Health Care Authority (OHCA), the state agency that oversees Oklahoma’s Medicaid program. Of those expenditures, $3.27 billion were paid using federal matching funds, with Oklahoma paying for the rest, approximately $2.2 billion.

OHCA is Oklahoma’s second-largest agency in terms of state-appropriated dollars, second only to the Oklahoma State Department of Education.

Oklahoma’s Medicaid program is funded by a combination of federal and state dollars, a cigarette tax, drug rebates, a hospital provider fee (SHOPP Assessment Fee), and other funds. Last year, tobacco tax funds and the SHOPP Assessment Fees generated $88 million and $210 million, respectively.

According to the OHCA’s 2019 Annual Report, prescription drugs were the largest expenditure for Medicaid members, totaling $621 million. The next largest expenditure categories were inpatient hospital services and nursing home services, which cost $585 million and $567 million, respectively.

Total expenditures are likely to be much greater beginning next July due to the expansion of Medicaid to able-bodied adults. State officials have estimated expansion could cost Oklahoma taxpayers up to $246 million next year.

Due to the economic fallout from the COVID-19 shutdown and a sharp decline in the oil and gas industry, the state legislature is likely to face an approximately $1 billion shortfall. To offset new health care costs associated with expansion and fill in funding gaps, the legislature has put State Question 814 on the November ballot. SQ 814 would direct more money from ongoing tobacco settlement payments to the legislature to help pay for state health care costs. If it passes, SQ 814 could provide an additional $50 million in state funds for Oklahoma’s Medicaid program annually.