Individuals

• 576 Oklahomans are now insured through the state’s Pre-Existing Condition Insurance Plan; these individuals were locked out of the coverage system because of a pre-existing condition and previously unable to obtain health insurance
• 1,197,000 residents are free from lifetime limits on their health plan
• 616,000 Oklahomans received preventive services from their insurer with no cost-sharing, i.e. cancer screenings and flu shots

Families

• 37,262 young adults in Oklahoma were able to keep their insurance coverage by staying on their parents plan until the age of 26
• $14.4 million in support for Maternal, Infant, and Early Childhood Home Visiting Programs in Oklahoma which bring health professionals to meet with at-risk families in their homes and offer education and guidance on health care, early education, parenting skills, child abuse prevention, and nutrition
• $1.8 million to provide pregnant and parenting teens and women with supportive services to help them complete high school or college and access health care, child care, and housing
  

Seniors

• 54,173 people with Medicare saved an average of $525 per person on their covered brand-name prescription drugs, a total savings of $28.5 million in Oklahoma
• 420,097 people with Medicare in Oklahoma received free preventive services, i.e. mammograms, colonoscopies, and a free annual wellness visit with their doctor

The ultimate fate of the Affordable Care Act rests in the hands of the U.S. Supreme Court.  Until we know if the so-called ‘individual mandate’ or Medicaid expansion provisions will be upheld, future benefits to Oklahomans under the health law are difficult to calculate.  However, it’s easy to see that the health care situation of hundreds of thousands of Oklahomans has already improved as a result of the new regulations and cost-sharing provisions that have already been enacted.  For more on the new law and the health care system in our state, visit our health care information page.

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Beginning in September 2010, the Affordable Care Act prohibited new health plans from denying coverage to children based on pre-existing conditions.  In some instances, insurers withdrew from the child-only market rather than comply with the guaranteed issue rule.  It’s very important to note that this did not include policies that are sold to adults with children as dependents – just child-only policies sold on the individual market.  Such policies are often sold to parents whose employers don’t have coverage or to grandparents on Medicare who are the primary caregivers to their grandchildren.  In thirty-three states, caregivers are still able to access child-only plans.  In fact, some states had guaranteed-issue for children even before the federal health care law.

However, seventeen states initially reported that no carriers were selling child-only plans to new enrollees after the guaranteed-issue rule went into effect.  Many of those states have since taken action to ensure that all their children are able to get coverage.  Colorado passed a law that mandated participating insurers cover children.  The legislation included sensible provisions to protect insurer profits – like a hefty surcharge for caregivers who drop coverage then re-enroll when their children got sick.  Kentucky’s Insurance Commissioner passed a rule that insurers participating in the state’s individual market had to cover children.  California passed a law barring insurers from participating in their market for five years if they withdrew from the child-only market.

Insurance Commissioner Doak

How did Oklahoma respond?  Our Insurance Department made a downright Faustian bargain with insurers:  In exchange for re-entering the child-only individual health insurance market, state regulators agreed to exclude babies up to 1 year old from coverage altogether.  The state permitted babies to be uninsurable in the child-only market in Oklahoma by law.  According to the Insurance Department, this is what insurance companies said they needed to reenter that market.

Why this age group is more risky (or less profitable) for insurers is a bit of a mystery.  A child can just as easily come down with an expensive life-threatening illness at 13 months as at 11 months.  Proponents of the rule have informally hinted at one insurer’s consternation over a supposed ‘million-dollar-baby’ in Oklahoma.  However, insurers are supposed to take on risk, it’s the very essence of their business model and business is booming.  Insurers in Oklahoma made about $25 million in after-tax profit last year in the individual market alone – which doesn’t even include profits from the large group market, where most Oklahomans get their health insurance.  Why the Insurance Department chose to accept such a radical demand from the industry is the real mystery.

Perversely, it’s the healthiest babies that are most affected.  There are two high-risk pools for individuals with pre-existing conditions currently operating in the state.  However, only those who are uninsurable because of serious health conditions are eligible for the state-funded pool and only those who have been uninsured for at least 6 months are eligible for the federally-funded pool.  Under Oklahoma’s new rule, insurers don’t have to offer coverage to healthy babies through a child-only plan anywhere in the state, period.  Caregivers with healthy newborn babies who aren’t eligible through an employer or make too much money to cover their baby through Medicaid, i.e. a successful entrepreneur or a grandparent on Medicare, are out of luck.

The Insurance Department, with the stamp of approval from Governor Fallin, has thrown the baby out with the bathwater.  It appears they’ve unilaterally ceded to insurers’ demands instead of taking action to protect and defend Oklahoma children, all the while blaming the new federal health care law.  Such a strategy may provide political cover, but it’s bad policy.  They could easily have made rule changes at the state-level to keep the child-only market viable without offering up newborn babies as a bargaining chip.  They simply chose not to.

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Last week, the Department of Human Services announced new co-payment and eligibility rules for the child care subsidy program, which we discussed in this post. By lowering the eligibility threshold for subsidies, the new rules will worsen the “cliff effect” whereby workers with the opportunity to move up the income ladder are penalized by losing work support benefits. Here we rerun a blog post on this subject that first appeared in June 2009; we have also discussed how health care reform promises to significantly improve the situation.

In recent years, whenever I’ve participated in forums on poverty and barriers to self-sufficiency, the single barrier raised most often and most fervently by those who work with low-income individuals and by low-income individuals themselves is the “cliff effect”. A 2007 report prepared for the Women’s Foundation of Colorado and the Women and Family action Network Coalition defined the cliff effect as follows:

Eligibility for work support benefits is typically based on income, so as their earnings increase, families lose eligibility for supports. A benefit cliff occurs when just a small increase in income leads to the complete termination of a benefit. The result is that parents can work and earn more, while their families end up worse off than they were before.

The cliff effect is most dramatic for Medicaid health insurance coverage, which tends to be an all-or-nothing benefit. Children in Oklahoma are eligible for Medicaid up to 185 percent of the federal poverty level, while adults lose eligibility when they make less than 50 percent of the poverty level. Other work support programs, including the earned income tax credit, the food stamp program, and child care subsidies, minimize the cliff effect by phasing out the amount of benefits at higher incomes, or in the case of child care subsidies, requiring higher co-payments. The cumulative effect, however, is that for most low-income workers who are attempting to move up the income ladder, additional earnings can be largely or fully offset by higher taxes and the loss of benefits. At a certain threshold, workers find themselves in a situation where the rational response to an offer of a raise or a better job is to respond, “Sorry, but I just can’t afford it.”

Concern about the cliff effect has been expressed by researchers and policy experts from both the liberal and conservative ends of the ideological spectrum. The Women’s Foundation of Colorado has even filmed a video on the cliff effect, which you can watch on You Tube. At this past year’s Fall Forum of the Oklahoma Institute for Child Advocacy identified the cliff effect as one of their top advocacy priorities for the 2009 session:

The 2009 Children’s Agenda supports efforts to reduce the “cliff effect” that results in an abrupt loss of all work-support benefits when a low-income family earns a small increase in wages by increasing the income eligibility limits for child care subsidies and phasing out benefits more gradually.

OICA and others have been working with the child care division of the Oklahoma Department of Human Services to modify the income eligibility limits for subsidized care to reduce the cliff effect. This would involve raising the eligibility threshold but having higher-income recipients contribute a larger co-payment. DHS proposed new eligibility standards that they estimate would provide subsidized care for an additional 1,600 children in higher-income households (those with incomes up to roughly $29,000 for families with one child in care and $43,500 for families with multiple children in care) at a cost of $3.5 million. The proposal is still under review.

Ultimately, though, any solution to the cliff  effect must begin by filling the chasm between Medicaid eligibility and unsubsidized private insurance. There are reasons to be optimistic. The Insure Oklahoma program already offers subsidized health insurance for adults up to 200 percent of the poverty level, who are required to contribute 15 percent of the cost of the premium up to a maximum of 5 percent of family income. Efforts to expand eligibility for Insure Oklahoma up to 250 percent of poverty for adults and 300 percent for children await federal approval. However, the program currently serves only 20,000 Oklahomans and may run out of funding once it reaches 35,000 to 40,000 people.

Federal health care reform efforts may provide a more comprehensive solution. Most variations of the proposals being developed in Congress involve a “Health Insurance Exchange” that would offer subsidies for those who earn too much to qualify for Medicaid but who are not offered or cannot afford the full cost of employer-based coverage. The Senate Finance Committee recently released a paper that proposed refundable tax credits on a sliding scale for taxpayers with incomes between 100 percent and 400 percent of the federal poverty level (which would exceed $80,000 for a family of four) for those who purchase coverage on the Exchange.

If national health care reform becomes a reality with mechanisms to help low- and moderate-income families with the costs of coverage, the sad refrain of “sorry, I can’t afford that raise” may be heard far less often.

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Julie is an Associate Professor and Assistant Director of the Anne and Henry Zarrow School of Social Work.

The number of uninsured individuals in Oklahoma has reached approximately 600,000 individuals. Almost half of Oklahoma’s uninsured are between the ages of 19-34. Despite this high number, little is known about why these young adults are underinsured or what strategies might encourage them to obtain coverage.

A state-wide survey and focus groups were designed to capture the opinions of young Oklahomans ages 19-34 regarding access to and the use of Oklahoma’s health care system in the absence of health insurance. Although it has been suggested that the young adults believe that they do not need health care coverage, results of the survey suggest otherwise.

Only a very small percentage of those without insurance reported that they did not have insurance because they did not need it. Further, those without insurance reported worrying about their health significantly more than those with insurance. Overwhelmingly, the main barrier for uninsurance status was cost: 85 percent of those survey indicated that cost was a significant barrier for obtaining health insurance. Many young adults also believed that they would not qualify for state insurance programs or were not employed, or employed at jobs without health coverage.

When those young adults without insurance were asked what they considered to be an affordable monthly premium, 97 percent reported that they could only afford a premium under $100.00.

Another assumption about young adults is that they are a fairly healthy group, with fewer and lower medical costs. Results from this study reveal a different picture. Young adults struggle significantly with medical costs; more troubling, 60 percent of uninsured young adults report having medical debt and 57 percent report that they have used pay day lenders to assist with covering medical costs. Debt among Oklahomans is a a major problem, and health care costs are a significant portion of this debt.

Further, young adults without insurance coverage report poorer health and over half report having long term and ongoing medical problems that require regular care as well as health related limitations.

Improving coverage for young adults is an important policy problem for Oklahoma, so what could be done?

• Address the affordability of coverage.
• Expand access to affordable care for Oklahoma’s young workforce. If we promote pathways to higher education and training for young adults, better paying jobs will mean better health insurance coverage.
• Educate young adults about state programs. Many young adults believe they are not eligible or are aware of state programs designed for adults without health insurance (e.g. Insure Oklahoma).
• Consider marketing campaigns aimed at young adults. On the precipice of health reform in Oklahoma and the development of health exchanges, young adults will require information specific to their needs. Social media campaigns that explain health care changes and options will increase knowledge and enhance decision making. Targeting young adults who are particularly at risk for underinsurance is also important (e.g. those without access to Cobra coverage through parents, lower income or minority young adults).

Strategies such as the above could prevent some of the serious health and financial consequences that young Oklahomans experience without health insurance coverage. Secure coverage would afford them both health and future economic stability.

This blog summarizes some findings of a collaborative state-wide survey of young, uninsured Oklahomans by the University of Oklahoma–Anne and Henry Zarrow School of Social Work and the Oklahoma Insurance Department. For the full report, please contact  jmcribbs@ou.edu

The opinions stated above are not necessarily those of OK Policy, its staff, or its board. This blog is a venue to help promote the discussion of ideas from various points of view, and we invite your comments and contributions. To see our guidelines for blog submissions, click here.

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It’s been almost a year since President Obama signed major health care reform legislation into law.  On the opening day of Oklahoma’s 53rd legislature, Governor Fallin made it clear that her administration would join other state’s in challenging one of the most controversial parts of the Affordable Care Act (ACA):

Many Oklahomans, including myself, feel that the federal mandate is unconstitutional and wrong. That’s why Attorney General Scott Pruitt and I have acted to add Oklahoma to the list of states that are now challenging the president’s health care law in court.

How does the governor’s – and by extensions the state’s – stance on the individual mandate affect the myriad other ACA changes?  For now, their position has no effect on the millions of dollars allocated to the states under the new law to address acute health care needs.  Beyond the individual mandate, which goes into effect in 2014, the ACA asks the states to make fundamental improvements in health care infrastructure and expand insurance coverage to the 671,663 Oklahomans who are currently uninsured.

The Affordable Care Act (ACA) contains two types of private insurance reforms: reforms to make the market fairer for people not in perfect health (and isn’t that all of us, really?) and reforms to make insurance more affordable.  Fans of OKPolicy’s budget outlook briefs and regular readers of this blog familiar with our recent gloomy assessments of the state’s budget might be doubting Oklahoma’s capacity to execute major structural reforms at a time when even core public services appear to be on the chopping block.  Fortunately, millions of dollars have already been made available in Oklahoma for programs that improve access to affordable care and affordable insurance.  Far from being a financial or regulatory burden on businesses or consumers, the measures listed below are already in place in Oklahoma and are actively easing the cost of care.

Early Retiree Subsidies for Employers: The federal government will pay employers a share of early retirees’ high-cost claims.  This helps employers keep premiums low for new health plan enrollees.  Oklahoma businesses already receiving funds include the City of Edmond, OG&E, the City of Altus, Devon Energy Corporation, Oklahoma Publishing Company and the University of Oklahoma.  Click here for a comprehensive list updated monthly.  Employers interested in the Early Retiree Reinsurance Program (EERP) should click here.

Pre-Existing Condition Insurance: 148 uninsured Oklahomans and counting have enrolled so far in the state’s new Pre-Existing Condition Insurance Plan program run by the Oklahoma Health Insurance High Risk Pool.  This plan provides a health coverage option for citizens who have been uninsured for at least six months, have a pre-existing condition or have been denied health coverage because of their health condition.  See OK Policy’s coverage of high risk pools in segment three of our ongoing series on health care reform.

‘Donut Hole’ Rebate Checks: 33,307 Oklahoma Medicare beneficiaries have received a one-time, tax free $250 rebate to help pay for prescriptions in the “donut hole” coverage gap.

Small Business Tax Credit:  Businesses subsidizing health care of up to 25 full-time employees can receive tax credits of up to 35 percent of their premium contribution for an average-cost plan.  Try this easy online interactive calculator to determine your business’s credit, or visit the IRS website for a more detailed explanation of eligibility rules.

Crack Down on Unreasonable Insurance Premium Increases: In Oklahoma, small group health plans are reviewed to guarantee that 60 percent of premium dollars collected are being spent on medical care and the state intends to create a consumer website to publicly post information on rate review.  Under the ACA, if states find a plan’s premium increases unreasonable, they can bar the plan from participating in state insurance exchanges. States can apply to receive up to $1 million in federal grants to strengthen their review of insurance premium increases.

$55.6 Million for Exchange Planning:  Oklahoma has already received federal funding to begin planning for the establishment of a health benefit exchange in 2014.  Our previous post on this topic delves into exchanges in greater detail, but basically the goal is for small businesses and individual consumers to pool their buying power and negotiate for higher quality and lower cost coverage from the private insurance market.  Oklahoma also recently received a 54.6 million dollar Early Innovator Grant to help design and support the information technology that will be needed to operate an effective health insurance exchange.

These federal dollars and programs are offered to states regardless of their stance on the individual mandate.  State leaders have indicated that health care is a public priority and are asking citizens to take responsibility for their own health.  Given that Oklahoma currently ranks 46th in the nation in citizen health, we hope that state leadership will couple their words of encouragement with adequate funding of public health initiatives and health care infrastructure.  Thanks to the ACA, they should be off to a running start.

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One of the most important provisions of the federal health care reform law, officially known as the Affordable Care Act (ACA), is the requirement that states establish private insurance marketplaces, or ‘Exchanges’, to sell plans to individuals and small groups in their state.  Health insurance exchanges were written into the law to ensure that these particularly vulnerable segments of the market – individuals and small groups – could obtain affordable coverage.  What is unique about these segments?  Well, consider how insurance works for a large group employer:  every employee is covered regardless of medical history and all employees pay roughly the same premiums.  This is possible, and perhaps more importantly profitable, because the risk of covering the sicker/costlier employees is offset by the ease of covering healthier/cheaper employees.

Now consider how insurance works in the individual and small group market:  currently, when you shop for insurance for yourself, or a handful of employees, you pay a much higher premium and have fewer plan options.  Why?  The insurance company does not have that larger pool of people to spread out the risk that you or your employees will be the sick/costly type.  This is exactly the problem exchanges are designed to remedy.  Exchanges enable individual and small group consumers in a state to pool their buying power and create a marketplace to negotiate with insurers for higher quality lower cost coverage, just like a large employer.

Exchanges, available in 2014, will provide information to consumers about each participating plan’s benefits, pricing, and eligibility.  It’s important to note that most of the plans offered on the Exchanges will be sold and administered by private insurers – the state’s role is to host and regulate the marketplace. Participation in the insurance exchange is voluntary; consumers can still choose to buy directly from an insurance company, through a broker, or through their employer, when available.  However, for those income-eligible for premium subsidies, the online Exchanges are expected to serve as the primary venue for determining eligibility and accessing those subsidies to buy insurance.

The states have significant discretion in setting standards for a plan’s inclusion in the online Exchanges, although the federal government has set minimum requirements.  For instance, insurance policies must cover ‘essential health benefits’, defined by the ACA to include at least the following:

ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care.

The ACA also requires that Exchanges be equipped with consumer-friendly features like a web portal, a toll-free assistance hotline, and an online coverage cost calculator.  Insurers must offer specified tiers of coverage presented in a standardized way to maximize comparability.  The Department of Health and Human Services explains how this requirement builds on existing online private insurance infrastructure:

All or virtually all of the information needed for the web portal is standard information that is already made available to individuals, insurance agents, or existing IT contractors with pricing engines and other entities that sell or otherwise provide health insurance to individuals and small groups. For example, information on deductibles, coverage, cost-sharing, and catastrophic protection limits is routinely available on all or virtually all insurance available to individuals or small groups. Nothing in this rule requires preparation of entirely new information. In essence, we simply require that relatively comprehensive information be provided in standardized formats so that plan comparisons can be automated in ways that present comparable information in comparable levels of detail to facilitate consumer understanding of available choices.

The Oklahoma Department of Mental Health & Substance Abuse Services received a $1 million dollar planning grant to begin developing Oklahoma’s Exchange.  The second Oklahoma Health Insurance Exchange public stakeholder meeting was held in late January in Oklahoma City.  The Exchange Project Managers are soliciting participation from stakeholders and have set up seven work groups, each tasked with a different aspect of exchange planning, including Governance & Administrative Structure; Enrollment; Eligibility Process & Infrastructure; Information Technology (IT); Carrier & Plan Selection; Financial Management & Premium Development, and Education and Marketing.

Considerably more funding for developing the Exchange may be on its way – Oklahoma is in contention to be one of five states that will receive an Early Innovators Grant, a grant to reward states that demonstrate leadership in developing cutting-edge technologies for insurance eligibility and enrollment.  The Oklahoma Health Care Authority (OHCA) has requested $54 million for a two-year project – the Oklahoma Health Infrastructure and Exchange Project (OHIEP) – to invest in developing the states health insurance technology infrastructure.

Even as legal and political challenges have left the future course of health care reform implementation in question, Oklahoma, like most states, seems determined to press ahead with putting a health insurance Exchange in place.  In addition to the grants received and work being done on Exchanges by OHCA, Senator Bill Brown (R) has introduced SB 960, “to create a health insurance exchange to facilitate the purchase of individual and small group health coverage within the state.”  In large part, Oklahoma policymakers are motivated by the knowledge that if states do not create their own exchanges, the ACA enables the federal government to step in and run a non-compliant state’s Exchange for them. Oklahoma policymakers seem committed to retaining control over the important policy choices involved in designing and operating the exchanges – even if that means that the hostile rhetoric about the new law coming from some elected officials ends up at odds with the real and important implementation work that is underway at the administrative level.

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The national health insurance data showed a continuation and acceleration of long-term trends: an overall decline in the percentage of Americans with health insurance, with progress in increasing the ranks of insured children through expanded access to public insurance (Medicaid and CHIP) being more than offset by the erosion of employer-sponsored insurance, leading to growing numbers of uninsured adults. Overall, the number of Americans without health insurance increased by 4.3 million to 50.7 million, bringing the rate of uninsured to 16.7 percent.

At the state level, there was an apparently stunning jump in the number of uninsured Oklahomans this year compared to last: 659,000 Oklahomans, or 18.1 percent, were reported to be without health insurance coverage in 2009 compared to 498,000, or 14.0 percent, in 2008. However, last year the Current Population Survey reported an enormous decline in the number of uninsured Oklahomans, as we discussed here.  Last year’s survey found gains in coverage across all ages and for private coverage as well as public, of a magnitude that stretched the limits of credibility. At the time we stated:

Whether there was a real burst of increased health insurance coverage at the tail end of Oklahoma’s economic boom, or whether we’re seeing numbers that stretch at the margins of error of any statistical sample, likely can’t be known.

This year’s numbers, as can be seen from the chart below, are much more in line with historical patterns and confirm the sense that last year’s survey was a pure anomaly that produced numbers that must either be ignored or taken with a giant grain of salt. Some of the main findings from the 2010 health insurance survey include:

• The uninsured rate for working-age Oklahomans (24. 3 percent) is almost twice as high as for children (12.6 percent). Nationally, the uninsured rate is 10.0 percent for children and 22.3 percent for working-age adults;
• For the Oklahoma population as a whole, just over half the population is covered through employer-based coverage. Just over one in three Oklahomans has public health insurance, whether Medicaid, Medicare, or military health. Oklahoma is a few percentage points below the national average in private health insurance and a few points above the national average in public coverage.
• For children in Oklahoma, as nationally, public health insurance programs have filled the gap created by declining employer-based coverage.  Slightly less than 50 percent of Oklahoma children are now insured through employer-based coverage, while 40 percent of children are insured by Medicaid.
• Among working-age adults, just under 60 percent of Oklahomans are insured through employer-based coverage, while less than 5 percent are insured by Medicaid.

Statements from health care advocates, such as the Center on Budget and Policy Priorities and Georgetown Center for Children and Families, point out how the continued declines in employer-sponsored coverage and rising rates of uninsured adults underscore the urgency of the new Affordable Care Act, which aims to increase health insurance coverage through a combination of expanded Medicaid eligibility for adults, subsidies for low-income families to purchase private coverage, and tax credits for small businesses to offer coverage.

Later this month, the Census Bureau will release its findings from the 2009 American Community Survey (ACS), a larger survey that is considered a more reliable source for one-year state-level data on poverty and income. For now, while we may not be able to speak with the certainty that we’d like about the exact number of Oklahomans living in poverty or lacking health insurance, we know that the effects of the recession are all around us, witnessed in the growing demands on private and public safety net providers, in rising hunger and homelessness and despair in communities across the state. As the Oklahoman stated before the release of the latest numbers, in an editorial titled, Poverty, hunger statistics in Oklahoma are alarming: “this is an issue that ought to concern everyone who cares about the collective welfare of their fellow Oklahomans.”

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Most people who have been following the Affordable Care Act, the new health care law passed earlier this year, know that the law will strengthen the individual market for health insurance coverage, by offering subsidized coverage on the new health insurance exchanges, and expand access to public coverage for low-income families through Medicaid. What is less well known and understand is that the Affordable Care Act also includes several important mechanisms for strengthening the beleagured employer-based system of health insurance coverage, especially for small businesses that currently face the greatest challenges in offering coverage to their workers and where the rates of the uninsured are currently the highest.

A recent report from Families USA looks at one of the most important provisions of the new law, tax credits for small businesses that will provide significant help with the cost of coverage. Beginning this year, businesses with fewer than 25 workers and average wages of less than $50,000 will be eligible to receive a tax credit for the health insurance premiums they provide to their employees.  The smallest firms with the lowest wages will be eligible for the maximum credit, which is 35 percent of the cost of coverage, or 25 percent for non-profits. The credit will phase down for businesses with more employees and higher average wages. Businesses that are already offering coverage, as well as those opting to cover the workers for the first time, will be eligible for the credits. After 2014, when the new health insurance exchanges will be operating, credits will increase to 50 percent of the cost of coverage, or 35 percent for non-profits.

According to estimates provided in the Families USA study, 50,300 Oklahoma small businesses – or six out of every seven businesses with 25 or fewer employees – will be eligible for a premium tax credit in 2010. Of these, some 18,200 are estimated to be eligible for the maximum 35 percent credit.

Oklahoma in recent years had already made a priority of assisting small businesses with the cost of health insurance  through the creation of Insure Oklahoma. Under this program, the cost of insurance premiums for low-income workers and their spouses is shared between employers (25 percent), employees (15 percent) and the state and federal governments (60 percent). Just over 18,000 employees of small businesses and their spouses were covered under Insure Oklahoma in August 2010. The new federal tax credits should complement and enhance the state’s efforts with Insure Oklahoma: according to Families USA, “small employers are eligible for the [new federal] tax credit even if they already receive assistance from their state to help them buy coverage from their workers.”

The new law includes other measures to help small businesses and their employees in the coming years. Right now, a new government website, healthcare.gov, provides a list of all companies offering small business plans in a given zipcode; by October the website will provide standardized information on plan benefits and costs to allow for better and easier comparisons. In 2014, the new health insurance exchanges for small businesses and individuals will be operating under a strict set of rules regarding benefits and industry practices aimed to promote access to quality coverage and competitive cost.

Even with eligibility for tax credits of up to 35 percent – or 50 percent beginning in 2014 – some small business owners will undoubtedly still decide they cannot afford or simply do not wish to offer health insurance to their employees (Unlike businesses with over 50 employees, small businesses will not face any potential penalty for choosing not to provide coverage). But for many small businesses here in Oklahoma and around the nation, the tax credits and market reforms included as an integral part of the new health care law can be expected to make the difference in creating access to quality, affordable care.

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It’s a widely known and much lamented fact that our current health insurance system can place the greatest obstacles in the path of precisely those most in need of affordable and adequate coverage. Individuals with pre-existing medical conditions who are unable to obtain coverage through their employer or government programs tend to be left uninsured or paying exorbitant premiums for insurance that may exclude their chronic conditions or disabilities.

A central goal of the new health care reform law passed in February is to solve this problem by prohibiting insurance companies from denying coverage based on pre-existing medical conditions. This prohibition will apply both to employer-based coverage and to products offered through the new health insurance exchanges, where those not covered by employer or public insurance will be able to purchase coverage, with sliding scale subsidies available for those with income up to 400 percent of the federal poverty level.

The problem for many Americans is that  the provisions creating the exchanges and prohibiting pre-existing conditions for adults don’t kick in until 2014 (for children, the prohibition takes effect later this year). In the interim, the  law creates new temporary high-risk pools that will operate from 2010 until the launch of the exchanges. The new high-risk pools will be available only to individuals who have a pre-existing condition and who have not had creditable health coverage for the previous six months. The premium cost for high-risk pool coverage will be established for a standard population in the non-group market and will not be based on the health status of enrollees.

Oklahoma currently operates a high-risk pool primarily for individuals who have been denied coverage on the individual market due to pre-existing conditions.  However, those who enroll in the high-risk pool are subject to a 12-month exclusion for coverage of their pre-existing condition. In addition, premiums are expensive – up to 150 percent of standard rates for the individual’s age and gender – and there are no premium subsidies for low-income applicants. As a result, current enrollment in the high-risk pool is less than 2,000 individuals.

By eliminating the waiting period for pre-existing conditions and setting costs at standard rates, the new temporary high-risk pool promises better coverage at more affordable cost for enrollees. The catch, however, is that limiting enrollment to those who have been uninsured for six months  excludes those currently enrolled in state high risk pools. As Oklahoma Insurance Commissioner Kim Holland has stated, this situation “effectively penalize(s) the people who have been doing the sacrificing all along.”  State and federal officials are exploring options for more equitable treatment of those in existing pools.

The other major issue surrounding the new high-risk pools, which are scheduled to begin operating by July 1, 2010, concerns responsibility for administering them.  The federal government has given the states the option of operating their own temporary high-risk pool or allowing the U.S. Department of Health and Human Services carry out the program in their state. While the health reform law allocated $5 billion to go toward health care claims and administrative costs that exceed the premiums collected for the pool, some observers, including the chief actuary of the Centers for Medicaid and Medicare Services, are concerned that the allocation will run out well in advance of 2014, potentially forcing states either to cap enrollment or assume new financial obligations.

States had until May 1st to make a preliminary decision on whether to administer the new temporary high-risk pool. According to data supplied us by the Insurance Commissioner, 31 states have notified the Secretary of Health and Human Services of their interest in operating their own program, while 18 have opted to punt to the federal government, and two remain undecided. Oklahoma is among those tentatively committed to pursuing a state-operated program, subject to continued discussions within the state and rule promulgation by the federal government.

Similarly to the temporary high-risk pool, the bill creates a temporary reinsurance program for employers providing health insurance coverage to retirees over age 55 who are not eligible for Medicare. This early retiree program, intended to lower insurance costs to plans that offer coverage for what is often an expensive population, is also funded with a $5 billion appropriation and is due to kick off July 1st of this year and operate until January 1, 2014.

These temporary, fast-tracked programs will only affect a sliver of the entire population that will be affected by health care reform, but may provide an early indication of whether the new law’s goals of covering those most ill-served by the nation’s existing health insurance system will eventually be met.

For eligibility information and an application form for the Oklahoma Temporary High Risk Pool, click here.

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Earlier this month, the radio documentary program This American Life aired two full one-hour programs devoted entirely to health care reform. As usual, the programs were insightful, entertaining, and thought-provoking. The first program focused primarily on trying to understand the exorbitant cost of the American health care system, with segments that looked at the role that doctors, consumers, and insurance companies play in keeping costs rising, even while more, and more expensive, care does not ensure better health outcomes.  The second episode focused on health insurance, and included segments tracing the history of the American employer-based health insurance system and looking at why more competition between insurers may not lower health insurance costs.

Unlike much media coverage and political discourse about health care reform, these programs avoid easy generalizations and simple solutions (“Insurance companies are greedy!” “Patient responsibility!” Public option!” “Health savings accounts!” ). Instead, they provide important reminders of the complexity of the health care system and the enormity of the challenges we face in trying to improve the quality of care at manageable costs.  Perhaps the only certainty we can count on is that whatever the precise nature of health care reform we end up with, or don’t end up with, this year, debates about health care will be with us for decades to come.

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