Oklahoma Draft Block Grant Waiver Application

Background

On March 16, 2020, Oklahoma Governor Kevin Stitt issued a draft Section 1115 waiver application to expand the state’s Medicaid program (SoonerCare) and make other modifications. The draft waiver is the first to be proposed under recent Trump Administration guidance that would allow states to transfer their Medicaid program to a block grant.

The waiver builds on the state’s authority under executive over 2018-05, signed by then-Governor Mary Fallin, and HB 2932, passed on May 8, 2018, which authorized the Oklahoma Health Care Authority (OHCA) to apply for waiver and state plan amendments that would allow the state to include work and community engagement requirements in SoonerCare.

Though it is the first to be proposed under the block grant guidance, the draft waiver includes few details regarding how the state will transition to a block grant. However, it does outline various modifications to Medicaid benefits for the proposed expansion population. The state is requesting approval for a five-year demonstration that would begin no sooner than July 1, 2021. The state is currently accepting public comments through April 15, 2020, before it submits the application to the Centers for Medicare and Medicaid Services (CMS) for approval.

The below summarizes key points of the waiver.

Eligibility

Through the draft waiver, Oklahoma proposes to cover all adults under the age of 65 who qualify for Medicaid on a basis other than disability and a need for long-term support, and who have incomes at or below 133% of the federal poverty level (FPL). These newly eligible adults would receive coverage through SoonerCare 2.0. Individuals who were previously eligible for Oklahoma Medicaid prior to expansion would not be affected and would remain in traditional SoonerCare.

Cost Sharing

Some beneficiaries in the expansion population would be required to make premium and copay payments in order to retain their coverage.

Premiums

SoonerCare 2.0 members would be required to make sliding scale flat rate premium payments. Individuals determined eligible for SoonerCare 2.0 would be charged a premium based on their household income and the number of individuals in the household participating in the program. Individual premiums must not exceed 2% of a household’s income.

Oklahoma proposes to create three income tiers to determine household premiums:

  • Tier 1: 0% FPL up to and including the Parent/Caretaker income standard
  • Tier 2: >Parent/Caretaker income standard-100% FPL
  • Tier 3: >100% FPL-133% FPL (+5% income disregard)

Since premiums would also vary based on the number of people in the household, Oklahoma would also create two tiers in SoonerCare 2.0 to reflect family participation:

  • Single: Only one adult in the household qualifies for and is enrolled in SoonerCare 2.0.
  • Family: Two or more adults in the household qualify for and are enrolled in SoonerCare 2.0.

Regardless of family size, beneficiaries in income Tier 1 would have no monthly premium obligations.

Individuals with a premium obligation would be required to pay their premium to initiate coverage. Upon initial enrollment, individuals with a premium obligation would have up to three months to complete the initial payment. If the individual does not complete the initial premium within three months, that individual would be considered ineligible for coverage and her application would be denied. Any individual denied coverage for lack of payment could re-apply for coverage at any time.

Once an eligible beneficiary completes the initial payment, he would be required to make monthly payments to retain his coverage. Individuals who do not pay the monthly premium would have a three-month grace period to complete unpaid premiums. If the individual does not catch up on premium payments within three months, she would be terminated from Medicaid coverage. The state would permit third parties, such as nonprofits and provider groups, to pay required premiums on behalf of a beneficiary.

For individuals who do not have a premium obligation, coverage would begin according to their application’s approval date. Currently, the state of Oklahoma conducts real-time eligibility determinations.

Some SoonerCare 2.0 beneficiaries would be exempt from paying premiums regardless of income status. Beneficiaries exempt from premiums would include:

  • Individuals with HIV/AIDs
  • Individuals with a substance use disorder
  • Individuals with a serious mental illness
  • Individuals who are justice involved
  • American Indians/Alaskan Natives
  • Pregnant women.

If one beneficiary in the household is exempt from premium payments, the entire household would be considered exempt from premium payments.

OHCA will request the flexibility to adjust premium payments by up to 5% of a household’s annual income. The state will also request the ability to temporarily pause or reduce premium payment policies across regional variations and population groups in response to unforeseen and acute challenges, such as natural disasters.

Copayments

SoonerCare 2.0 beneficiaries would be charged copayments in addition to their premium obligation, up to 5% of the out-of-pocket cost-sharing limit. SoonerCare 2.0 members would potentially be subject to a copayment of $8 for non-emergency use of the emergency department. OHCA plans to evaluate the impact of the $8 copay for non-emergency use of the emergency department on member behaviors, and will request the flexibility to adjust the copayment in later years based on the results of those evaluations.

Copayments would be collected at the point of service and would not affect individual eligibility and enrollment in SoonerCare 2.0. Providers would not be permitted to deny service based on a beneficiary’s inability to pay the copay.

In order to ensure that beneficiaries do not incur cost sharing that exceeds 5% of their household income, the Medicaid Management Information System (MMIS) tracks cost-sharing expenditures incurred across household members and re-sets at the beginning of each month. Systematic tracking of cost sharing occurs in real time as claims are adjudicated in MMIS. MMIS is programmed not to deduct copayments from claims for Medicaid recipients and services that are exempt from cost sharing.

Individuals who are liable for premium payments up to 5% of their income would not be required to make additional cost-sharing payments.