The decision means Oklahoma will not do anything to accommodate the controversial federal health care law known as Obamacare but it also means the state will skip an opportunity to help some 693,000 uninsured Oklahomans, 18.7 percent of the state population, get coverage through the federal government.

After careful consideration, I have today informed U.S. Secretary of Health Kathleen Sebelius that Oklahoma will not pursue the creation of its own health insurance exchange, Fallin said. Furthermore, I have also decided that Oklahoma will not be participating in the Obama Administrations proposed expansion of Medicaid.

Any exchange that is compliant with the federal health care law will necessarily be state-run in name only and would require Oklahoma resources, staff and tax dollars to implement, Fallin said.

It does not benefit Oklahoma taxpayers to actively support and fund a new government program that will ultimately be under the control of the federal government, that is opposed by a clear majority of Oklahomans and that will further the implementation of a law that threatens to erode both the quality of American health care and the fiscal stability of the nation, she said.

A Medicaid expansion would cost the state up to $475 million between now and 2020, with escalating annual expenses in subsequent years, Fallin said.

Other estimates of Medicaid expansion are much lower, and some show the state would actually save money with the move.

In reality, the expansion is a very favorable deal for Oklahoma, said David Blatt, director of the Oklahoma Policy Institute.

The federal government will pay 100 percent of the cost for the first three years and then gradually shift costs to the states with a that amount capping at 10 percent in 2020. The Oklahoma Health Care Authority estimates the states share of Medicaid costs in 2020 would be $28 million to $37 million, an amount that is less than 0.5 percent of current state appropriations, Blatt said.

With savings to the states health, mental health and prison programs and increased tax revenues from new medical professionals needed to cover increased demand that would come with the expansion, the Urban Institute has estimated that Oklahomas budget comes out saving money with the move.

But Fallin said the Medicaid expansion is the wrong direction for the state. It would also further Oklahomas reliance on federal money that may or may not be available in the future given the dire fiscal problems facing the federal government, Fallin said. On a state level, massive new costs associated with Medicaid expansion would require cuts to important government priorities such as education and public safety.

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Fallin rejects health care exchange, Medicaid expansion