• Oklahoma voters on Tuesday narrowly approved Medicaid expansion, making it the 37th state to broaden the safety-net program to a greater share of low-income residents and the first state to do so since the beginning of the COVID-19 pandemic, which has caused millions to lose coverage.

• The vote squeaked by with 50.5% in support, passing by less than one percentage point and making roughly 200,000 Oklahomans newly eligible for Medicaid.

• The vote throws a wrench into Republican Gov. Kevin Stitt’s plan to cap funding in the state’s Medicaid program for the expansion population. Oklahoma would have been the first state to enact block grants under controversial guidance released by the Trump administration in January.

Dive Insight:

It’s unlikely expansion could have come at a more pivotal time for Oklahoma. Average COVID-19 cases in the state have more than doubled in the past month as the U.S. faces a resurgence in infections, with Oklahoma reporting a record high in new infections Tuesday.

That’s amid rising unemployment as the economic ripples from the coronavirus have caused an estimated 27 million Americans nationwide to lose job-based insurance. Oklahoma’s unemployment rate has reached 12.5% in recent months. The state already has the second-highest uninsured rate after Texas at more than 14%, so expansion could be a lifeline for hundreds of thousands of residents, while propping up the state’s struggling rural hospitals

The expansion is a “bright spot in dark times,” Vivek Murphy, U.S. surgeon general under former President Barack Obama, said on Twitter.

With the approval, the state will extend coverage to low-income adults without children earning $17,200 a year, or $35,500 for a family of four, a population that earns too little to qualify for subsidized insurance in the Affordable Care Act marketplace.

The Oklahoma Health Care Authority projects roughly 215,000 residents will qualify for an expansion, on top of the state’s current Medicaid enrollment of more than 833,300 people, per data from May.

The state, which is facing an acute budget shortfall, now needs to figure out how to pay for it. The expansion will cost an estimated $1.3 billion annually, with the state on the hook for roughly $164 million. Stitt, who decided not to pursue traditional expansion earlier this year, vetoed a bill in May that would have paid for the majority of expansion by upping hospital fees, saying it wasn’t a reliable source of funds in the long term.

Tuesday’s vote complicates plans for Oklahoma to be a test case for long-held conservative dreams to impose block grants in the 55-year-old entitlement program. Republicans see capping funding in Medicaid as a way to control runaway spending, while Democrats oppose the model on the grounds it could lead states to ration care or leave them strapped for funds in event of an unforeseen health emergency.

Oklahoma’s block grant waiver, which would apply capped funding to the expansion population, is still pending before CMS. It’s uncertain whether the ballot measure preempts the waiver, submitted to the administration in April. Oklahoma’s health deputy secretary Carter Kimble told Politico on Monday the state wouldn’t necessarily ax its block grant plan in the event expansion passes, and would have to look at legality from all angles.

Either way, it’s a blow to President Donald Trump’s healthcare agenda. The president vehemently opposes the ACA, and his administration is currently pursuing a lawsuit in front of the U.S. Supreme Court to declare the 10-year-old law unconstitutional. That would invalidate Medicaid expansions nationwide and cause some 22 million Americans to lose coverage.

“Voters are tired of politicians ignoring the problem or worse, trying to take their health care away, and they’re rejecting that approach in even the deepest of red states,” said Jonathan Schleifer, executive director of The Fairness Project, an advocacy group for expansion, in a statement. “Americans want more health care — not less.”

The vote follows ballot measures in other deep red states like Idaho, Nebraska and Utah, continuing the trend of majority-Republican states approving expansion. But Oklahoma is the first state to constitutionally protect expansion, meant to keep its legislature from injecting conservative measures like work requirements into the program.

Some 13 states, including many that have seen a recent surge in COVID-19 cases, have yet to expand Medicaid. Missouri will be the next state to vote on expansion, on Aug. 4. More than 230,000 low-income Americans in Missouri would gain access to coverage if expanded.