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March 2009

Oklahoma Releases Plan to Expand Coverage

In March 2009, the Oklahoma Insurance Department released An SCI Plan, a report detailing recommended strategies to increase health insurance coverage in the state.  The report was prepared by Oklahoma’s State Coverage Initiative Team, a grantee funded under SCI’s Coverage Institute, and made up of representatives from the Oklahoma Insurance Department, Oklahoma Department of Health, the Oklahoma Legislature, the Oklahoma Health Care Authority, the Oklahoma Department of Mental Health and Substance Abuse, the Cherokee National Health Services, Integris Health, Blue Cross/Blue Shield of Oklahoma, and the University of Oklahoma’s College of Public Health.  The report was two years in the making and is the result of numerous meetings of the Oklahoma State Coverage Institute Team and the input of hundreds of Oklahoma citizens and organizations.  

The report’s recommended plan, consisting of five strategies, is expected to take at least five years to fully implement.  The strategies are designed to respond to Oklahomans’ lack of access to and lack of interest in obtaining health insurance, and designed to further evolve when certain benchmarks have been met.  The five strategies are:

  1. Maximizing Current Opportunities  
    • The plan calls for maximizing enrollment in Oklahoma’s premium assistance program, Insure Oklahoma, and its Medicaid program, SoonerCare, in a two-phase process.  The first phase would entail aggressive enrollment of individuals who qualify for either of the two state programs and for whom funding is already available.  This would be achieved by establishing an insurance connector for Insure Oklahoma catering to small- and medium-sized businesses and streamlining enrollment processes.  The second phase involves enrolling individuals for whom there is not yet a source of funding.  This would entail securing a funding source for those individuals already eligible under current state law and submitting a waiver to CMS to cover additional enrollees.
  1. Create Affordable Commercial Health Plans
    • An SCI Plan calls for the creation of two types of affordable benefit plans designed to meet the terms of a federal waiver and receive federal matching.  However, if a federal match were not available, the plans could be funded with state dollars or sold as low-cost commercial options.  The first of these plans would offer an array of benefits similar to Insure Oklahoma with low co-payments.  This would be achieved by capping covered expenses at a low annual limit (roughly $50,000) and enrolling those with expenses above that limit in the Oklahoma High Risk Pool to cover catastrophic risk.  The second plan would entail the creation of a set of affordable benefit plans which would be free of state mandates for coverage of certain conditions, providers, and services.  The elimination of these state mandates would allow for affordable products to be offered and would be popular with Oklahoma consumers.  Eligibility requirements and other mechanisms would be implemented to minimize adverse selection and crowd-out.
  1. Generate Revenues Through a Dedicated Insurance Fee
    • Oklahoma employers, insured individuals, and all others who pay for health care out-of-pocket pay an estimated $954 million to cover uncompensated care.  The SCI plan calls for creating a dedicated assessment fee to recapture this cost shift and fund expansions of coverage.  The fee would be applied to all private insurance claims paid to private health care facilities and providers.  The fee, 50 cents per every $100 of payment to private insurers, would yield $111 million when matched with federal funds and would provide premium assistance for an additional 40,000 Oklahomans.  Once the majority of those 40,000 were covered, an additional 50 cents per $100 would be assessed.  The plan also proposes the possibility of a hospital-only fee to fund Medicaid hospital rate increases.
  1. Encourage Oklahomans to Obtain Insurance Coverage
    • The plan calls for the establishment of health insurance requirements, such as mandating that individuals demonstrate proof of having health insurance for six months prior to a stipulated event and enabling more robust collection measures to allow health care providers to collect payments from individuals for their medical debts.  However, the plan acknowledges the possibility that such measures will not increase insurance uptake sufficiently, and advises the Oklahoma legislature to consider adopting an individual mandate if enrollment targets are not met.
  1. Pursue Complementary Initiatives
    • The SCI plan identifies a number of initiatives, at both the federal and state level, that would further the goal of reducing the number of uninsured in Oklahoma and improving the health outcomes of all Oklahomans.  It then outlines implementation responsibilities for the state legislature, Oklahoma Insurance Department, Oklahoma Health Care Authority, Oklahoma’s federal delegation in Washington, D.C., and state health insurers.

Despite the significant political and economic barriers to expanding coverage in the state, the Oklahoma SCI team believes its goals are achievable if the necessary support is given by all partners in the political and commercial arenas. 

For more detailed information on the Oklahoma SCI team’s proposals, read the full report.