The News on 6 in Tulsa reported last week on Oklahomans who lack health insurance. OK Policy’s David Blatt was featured in the story, available here in both print and video, describing who is likely to be uninsured and explaining how care for the uninsured drives up premium costs for everybody. Read the rest of this entry »

Like most people who watch public budgets, we tend to focus on what is being spent, at the expense of what is being bought. Our upcoming Online Guide to Oklahoma Budget and Taxes looks at state and local expenditures more broadly than the traditional view. For each of six functional areas, the Guide reminds us why we have asked government to take some responsibility and what we hope will result from this collective effort. Then we offer some measures we can use to check progress.

Here are some excerpts from our section on Health and Social Services:

Human, health and social services provide the safety net that is essential to our society. Most Oklahomans agree that government should insure that vulnerable individuals and families can meet their basic needs. It also should promote healthy lifestyles that reduce public and private costs.

Our measures of success in this area suggest we have work to do.

• 15.9 percent of Oklahomans are poor, according to the federal definition, compared to 11 percent nationwide.
• Oklahoma ranked 43rd in overall health in 2007, according to the United Health Foundation.
• 18.7 percent of Oklahomans did not have health insurance in 2006, making Oklahoma 5th highest in uninsured population.

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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.”

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