Officials with the Oklahoma Health Care Authority are watching how two issues will play out that could affect nearly $120 million in their current budget.
The authority’s fiscal year 2018 budget includes $70 million from funding that would be generated from the new cigarette fee approved by the Legislature earlier this year.
The constitutionality of the fee will be decided by the state Supreme Court, which will hear oral arguments Aug. 8. The $1.50 a pack fee is slated to take effect Aug. 24.
Uncertainty also exists about $49 million in funding through the federal Children’s Health Insurance Program.
“We remain cautiously optimistic that we will be able to sustain our programs throughout this next year,” said Becky Pasternik-Ikard, CEO of the Health Care Authority.
Pasternik-Ikard was in Tulsa on Monday to address members of the Tulsa Regional Chamber in a presentation called “State of the Health Care Authority.”
The cigarette fee, expected to generate $215 million for fiscal year 2018, originated in the Senate on the final day of the legislative session and obtained a simple majority in the House.
Revenue-raising measures are required to start in the House, not be passed in the last five days of session and pass by a supermajority in both legislative chambers.
If the fee is found unconstitutional, the likely next step would be for a special session to convene to address the loss of revenue.
The loss of the $70 million allocated to the Health Care Authority would amount to an 8 percent cut to Medicaid providers. However, officials said efforts would be made to ensure the impact of the cuts would be minimized by looking at other cost-saving measures.
“Certainly as you look at those options, they impact people’s lives,” Pasternik-Ikard said.
Funding for the Children’s Health Insurance Program, or CHIP, is federal money provided in addition to traditional Medicaid funding. The funds are authorized through 2019, but funding is only approved through September. If an extension is not approved, the state would lose out on funding that is already accounted for.
The Health Care Authority did receive a bump in its state appropriation over the previous year. Even with the increased funding — and if the cigarette fee and CHIP funding remain intact — the agency is facing a $34 million shortfall.
SoonerCare, the state’s Medicaid program, provides insurance coverage to nearly 814,000 people, two-thirds of them children.
The agency also provides insurance for pregnant women, the elderly and disabled people.