Oklahoma governor Mary Fallin (R) declared that her state won’t set up a state based exchange or take part in the Medicaid expansion. From Fallin’s office:

“Furthermore, I have also decided that Oklahoma will not be participating in the Obama Administration’s proposed expansion of Medicaid. Such an expansion would be unaffordable, costing the state of Oklahoma up to $475 million between now and 2020, with escalating annual expenses in subsequent years. It would also further Oklahoma’s reliance on federal money that may or may not be available in the future given the dire fiscal problems facing the federal government. On a state level, massive new costs associated with Medicaid expansion would require cuts to important government priorities such as education and public safety. Furthermore, the proposed Medicaid expansion offers no meaningful reform to a massive entitlement program already contributing to the out-of-control spending of the federal government.

The governors decision not to set up a state based exchange is mostly unimportant since that means the federal government will create one instead. The decision to reject the Medicaid expansion though will have a significant impact thousands of lower income people in the state. People without insurance making more than 100% of the federal poverty line will qualify for exchange subsidies but it looks like people making less than that will be out of luck.

Ever since the Supreme Court made the decision to expand Medicaid under the Affordable Care Act optional for states, several Republican governors have said their states won’t take part. There is some hope that the Medicaid expansion would end up being “too good of a deal” for states to refuse and eventual all the states will take part. Even if all states do end up taking part it could take years for some red states to come around.

The only way to assure that all low income Americans have access to Medicaid is to finally federalize the program. There are many reasons Medicaid should never been a state-federal partnership and emergence of this last issue means this is a great time to fix its design.