With just one week left until the legislature’s scheduled adjournment, Governor Mary Fallin has called on legislators to approve last-minute changes to the Insure Oklahoma program. These questions and answers explain what is being proposed and the vital issues that are at stake:

Question #1: What is Governor Fallin’s proposal?

The Governor proposes to provide health insurance coverage to some 9,000 people with state-only dollars by redirecting close to $50 million that are currently being spent to match federal Medicaid dollars for the Insure Oklahoma program.

Question #2: What is Insure Oklahoma?

Insure Oklahoma is a public-private health insurance program created in 2005 under a Medicaid 1115 waiver to provide coverage for low-income adults. The state’s share of funding for Insure Oklahoma comes from a portion of the tobacco tax revenues approved by Oklahoma voters in 2004, and is matched with federal Medicaid funds. In FY 2011, the program received $46.0 million in state funds. Insure Oklahoma has two components:

• Employer-Sponsored Insurance (ESI) provides premium assistance to employees and their spouses with income up to 200 percent of the poverty level to purchase employer coverage. Businesses with fewer than 100 employees are eligible to participate. Employers and employees pay a portion of the cost of coverage, and Medicaid covers the rest;
• The Individual Plan (IO) allows qualified adults and their dependents with incomes below 200 percent of the poverty level to buy into Medicaid coverage. It is available to employees of small businesses with fewer than 100 employees who are not eligible for employer-based coverage, self-employed adults, the temporarily unemployed, and some adults with disabilities. Members pay up to 5 percent of their income towards the cost of coverage, with the remainder paid for by Medicaid.

Insure Oklahoma currently covers 29,984 members, of whom 56 percent (16,699) are insured through Employer-Sponsored Insurance and 44 percent (13,286) through the Individual Plan. Currently, 96 percent of IO members are adults, with the remainder being dependent children and students.

Question #3: Why is the future of Insure Oklahoma at risk?

Full implementation of the Affordable Care Act fundamentally alters the health care landscape. Beginning in January 2014, IO members with income above 100 percent of the federal poverty level – some 22,000 individuals – will qualify for tax credits, paid for entirely with federal funds, to purchase insurance on the new health insurance exchanges, which, in Oklahoma, will be operated by the federal government. IO members with incomes below the poverty level – some 8,400 current members – were expected to become eligible for Medicaid, with the federal government assuming 100 percent of the cost for the first three years (2014-16) and 90 percent from 2020 onwards.  However, Governor Fallin’s rejection of Medicaid expansion has left Insure Oklahoma members with incomes below the poverty level at risk of losing coverage and being in the same situation as some 130,000 – 180,000 other low-income working-age adults who would be stuck in a “coverage crater.” Oklahoma’s current waiver for Insure Oklahoma is set to expire December 31, 2103.

Question #4: What is the federal government’s position on extending Insure Oklahoma?

In early May, the Centers on Medicare and Medicaid Services (CMS) sent Oklahoma a letter stating that implementation of the Affordable Care Act means that “an extension of the Insure Oklahoma program without any changes is not possible.” In particular, the federal government will no longer provide federal funding for programs with enrollment caps, as these contradict the Affordable Care Act’s efforts to make coverage available to all low-income adults.

CMS did, however, strongly emphasize its willingness to work with Oklahoma on options to ensure that those currently enrolled in the program would continue to have coverage. In particular, CMS indicated its openness to approaches, such as those being pursued in Arkansas, to use federal Medicaid dollars for premium assistance to subsidize the purchase of private insurance:

Should the state be interested in exploring the use of premium assistance for the new adults group under the Medicaid expansion, given Oklahoma’s history of using Medicaid premium assistance to provide coverage options to Oklahomans, we would welcome working with you on such a model, consistent with our guidance.

Question #5: Is there an alternative to the Governor’s plan that would keep existing Insure Oklahoma members from losing coverage?

Yes. In early May, Leavitt Partners, the national consulting firm the Governor tasked with developing an Oklahoma Plan, delivered a preliminary report to the Oklahoma Health Care Authority Board. It recommends using Insure Oklahoma “as the base for a premium support program for adults up to 138 percent of the federal poverty level.” It envisions maintaining both components of Insure Oklahoma: premium subsidies for commercial employer-sponsored coverage and a modified public Individual Plan.  The preliminary report also sketches out a number of reforms to improve care delivery and reduce costs. The proposal is intended to allow Oklahoma to access federal funds to expand coverage.

The Leavitt Partners proposal recommends January 2015 as a realistic time frame for launching a new program. In the meantime, it suggests extending Insure Oklahoma past its current December 2013 expiration date. This would require negotiating changes to comply with new federal requirements, such as lifting the program’s existing enrollment cap, prior to the date (July 15th) when the state would have to submit a phase-out plan for Insure Oklahoma to CMS.  The Oklahoma Health Care Authority believes it will be able to negotiate a program extension. Since the program would only be responsible for covering those with income below 100 percent of poverty who are ineligible for subsidized coverage on the exchange, current state funding should be adequate in the short-term, even if enrollment caps are lifted.

Question #6: What is the bottom line for Oklahoma taxpayers and citizens?

Governor Fallin is proposing to use close to $50 million in state-only dollars to cover fewer than 10,000 people when we have the opportunity to access federal funds to cover some 130,000 – 180,000 people at little or no state expense within the framework of the Insure Oklahoma program. This is not a responsible use of taxpayer dollars and it does not offer the best opportunity to improve the health and well-being of Oklahoma’s citizens or to boost to Oklahoma’s health care providers and businesses.

For OK Policy’s statement on the Governor’s proposal, click here. For full coverage of Medicaid and the Affordable Care Act, click here.

In The Know is a daily synopsis of Oklahoma policy-related news and blogs. Inclusion of a story does not necessarily mean endorsement by the Oklahoma Policy Institute. You can sign up here to receive In The Know by e-mail.

Today you should know that House Speaker T.W. Shannon and Governor Fallin were the top recipients of nearly $200,000 in campaign dollars and gifts given by the private prison industry since 2004. Governor Fallin asked the legislator to transform Insure Oklahoma into a smaller program using $50 million additional state-only dollars to avoid making changes requested by the federal government. Oklahoma Policy Institute released a statement that the governor’s proposal sacrifices taxpayers and the uninsured.

The Athens Banner-Herald has a Q&A with an administrator for the federally-run insurance exchange for Oklahoma, which will be operated out of Dallas. Oklahoma GOP legislative leaders are split on several issues they intend to take on in the final week of session: an override Gov. Fallin’s veto of a pension bill, common core standards, and funding for the American Indian Cultural Center and Tulsa Pop Museum. The Comanche schools superintendent writes that state budget cuts are pushing educators into early retirement. The okeducationtruths blog has an in-depth look at this year’s education budget.

State Superintendent Janet Barresi denied any involvement in the hiring of a testing company whose technical problems disrupted online tests for more than 9,000 students last month. The State Department of Education is investigating Jenks Public Schools to see if its parent-led movement to opt students out of tests was instigated or encouraged by district employees. The Tulsa City-County Library has cut more than $800,000 from its proposed operating budget due to the SQ 766 property tax cuts for large corporations.

Despite calls by several Oklahoma legislators to address hundreds of millions of dollars in state tax credits and exemptions for businesses and industries, little has been done as another session approaches its end. The conservative blogger OK Politechs writes that Governor Fallin, Speaker T.W. Shannon and others are making highly misleading claims about the recently passed income tax cuts. The Number of the Day is the percentage drop in the number of natural gas rigs drilling in Oklahoma over the past year. In today’s Policy Note, a University of Illinois law professor writes in the New York Times that the IRS scandal around Tea Party groups shows why we should eliminate 501(c)(4)s.

continue reading In The Know: Lawmakers received nearly $200k from private prisons

The Weekly Wonk is a summary of Oklahoma Policy Institute’s events, publications, blog posts, and coverage.  Numbers of the Day and Policy Notes are from our daily news briefing, In The Know.  Click here to subscribe to In The Know.

OK Policy’s Executive Director, David Blatt’s Journal Record column explains why the Legislature’s refusal to approve any new bonds is financially irresponsible. KJRH, mentioned OK Policy in their report that despite a recently approved bond issue for Tulsa Public Schools, education funding is still a problem in Oklahoma.

The OK Policy Blog addressed silver linings in the tax cut debate and highlighted social impact bonds, a promising new approach that Oklahoma could use to fund smart on crime reforms. We also discussed a consultant’s report on developing an Oklahoma plan for expanding health coverage, which appears to be moving Oklahoma along a path to accept federal dollars and shared a 3-minute video that sheds light on America’s racial wealth gap.

Numbers of the Day

• 10.0 percent – Percentage of Oklahoma households with a past due mortgage, compared to 10.8 percent nationally
• 11 – The number of payday loans the average borrower takes out over 12 months, ultimately paying $574 in interest on $392 in loans
• $1.4 trillion – Projected GDP growth over 10 years if the U.S. granted resident immigrants legal status and a pathway to citizenship; conversely, mass deportation and ‘zero-immigration’ enforcement policies would decrease GDP by $2.6 trillion over the same period
• 30,000 – The number of Oklahomans, one-third of whom have incomes below the poverty level, who will lose their state-sponsored health coverage if Oklahoma continues to refuse to comply with the Affordable Care Act
• $39,160 – Average annual wage in Oklahoma, 42nd lowest in the U.S. in 2012

Policy Notes

• Jared Bernstein writes in the New York Times that the United States needs a new approach to address a persistent lack of jobs.
• Pro Publica investigates unethical business practices at World Finance, which sells high-interest installment loans in Oklahoma and other states.
• Wonkblog discusses new Congressional Budget Office projections that the U.S. deficit problem is solved for the next 10 years.
• The Atlantic shares two maps that explode one of the biggest myths about student loans.
• The Washington Post reports on the Obama administration’s new draft of regulations for fracking on federal and Indian lands.

Oklahoma Policy Institute released the following statement in response to Governor Fallin’s call to continue Insure Oklahoma with state-only dollars:

It should be of grave concern to Oklahomans that Governor Fallin is proposing to use $50 million in state-only dollars to cover fewer than 10,000 people when we have the opportunity to access federal funds to cover some 150,000 people at little or no state expense. Oklahoma taxpayers and uninsured Oklahomans would be left to suffer to make a political point that the Governor is unwilling to cooperate with the Affordable Care Act.

While the federal government has indicated that Oklahoma must make changes to the Insure Oklahoma program to continue past 2013, it has also emphasized its willingness to work with the state to explore various options, including using the Insure Oklahoma model to purchase private insurance with federal dollars. The Governor’s proposal flies in the face of a preliminary report by the Leavitt Partners, which she requested and contracted with $500,000 taxpayer dollars, that recommends using federal funds to expand health insurance coverage while working to extend Insure Oklahoma beyond this year.

The Legislature should protect Oklahoma’s financial and health care interests by insisting that we provide quality health insurance to the greatest number of people at the least expense to the state.

In The Know is a daily synopsis of Oklahoma policy-related news and blogs. Inclusion of a story does not necessarily mean endorsement by the Oklahoma Policy Institute. You can sign up here to receive In The Know by e-mail.

Today you should know that with just two weeks left in the legislative session, Republican House Speaker T.W. Shannon said he will introduce a measure to repeal common core standards in Oklahoma school districts. The Legislature approved a bill to ban prescription refills of the painkiller hydrocodone. A Senate panel approved a measure to fund the American Indian Cultural Center and a pop culture museum in Tulsa with money taken off the top of sales tax and use tax revenues.

After 18 months of growth, Oklahoma City’s sales tax receipts have dropped two months in a row compared to the previous year. Senate Minority Leader Sean Burrage wrote in the Pryor Daily Times that the income tax cut signed by Governor Fallin will do almost nothing for 80 percent of Oklahomans. M. Scott Carter writes that by combining the tax cut and state Capitol repairs into one bill, lawmakers are thumbing their nose at the state’s constitutional ban on logrolling.

NewsOK writes that Oklahoma corrections officers are hoping for a cool August, since they are unprepared to safely deal with prison riots in the heat. The OK Policy Blog shared a 3-minute video that sheds light on America’s racial wealth gap. This Land Press has an in-depth story on the struggle of descendants of black slaves held by Cherokees to keep their citizenship in the Cherokee Nation.

The Number of the Day is the average annual wage in Oklahoma, 42nd lowest in the U.S. in 2012. In today’s Policy Note, the Washington Post reports on the Obama administration’s new draft of regulations for fracking on federal and Indian lands.

continue reading In The Know: House Speaker introducing bill to repeal common core standards

The racial wealth gap has been a hot topic lately on our blog.  The United States remains one of the wealthiest countries in the world, yet escaping poverty and achieving prosperity remains out of reach for millions of Americans.  Too many people of color, striving to make a better life for themselves and their families, face significant barriers to building wealth and less access to opportunities that are widely available for Whites.

This 3-minute video from the Urban Institute sheds more light on the issue with a simple, compelling illustration.  This animation is based on research by Eugene Steuerle, Signe-Mary McKernan, Caroline Ratcliffe, and Sisi Zhang of the Urban Institute.

Click here to read OK Policy’s paper, ‘Closing the Opportunity Gap: Building Equity in Oklahoma.‘

Watch This Too:

• The New Jim Crow
• The Line
• Just the Facts
• Illegal

In The Know is a daily synopsis of Oklahoma policy-related news and blogs. Inclusion of a story does not necessarily mean endorsement by the Oklahoma Policy Institute. You can sign up here to receive In The Know by e-mail.

Today you should know that Oklahoma’s statewide average gas price surged above the national average for the first time in more than 5 years. The Cherokee Nation has approved plans to team up with four other tribes to develop a 90-turbine wind farm in Kay County. The OK Policy Blog discussed a consultant’s report on developing an Oklahoma plan for expanding health coverage, which appears to be moving Oklahoma along a path to accept federal dollars.

Kaiser Health News reports on a new Oklahoma law that could force doctors to perform painful, costly, and often futile medical interventions on disabled, elderly, or terminally ill patients if they have any chance of extending life. David Blatt’s Journal Record column explains why the Legislature’s refusal to approve any new bonds is financially irresponsible. NewsOK urged caution about using short term revenue trends to make verdicts on the effect of tax cuts.

The Tulsa World writes that funding for an Oklahoma popular culture museum is important for its economic benefits and to preserve Oklahoma history. KJRH reports that despite a recently approved bond issue for Tulsa Public Schools, education funding is still a problem in Oklahoma. The Number of the Day is the number of Oklahomans, one-third of whom have incomes below the poverty level, who will lose their state-sponsored health coverage if Oklahoma continues to refuse to comply with the Affordable Care Act. In today’s Policy Note, the Atlantic shares two maps that explode one of the biggest myths about student loans.

continue reading In The Know: Oklahoma gas price surges above national average

Last week saw important developments in the  debate over expanding  health coverage for uninsured low-income Oklahomans. While it now seems certain that Oklahoma will not expand coverage at the start of 2014, the state finally appears to be moving along a path to accept federal dollars for expanding coverage in future years.

In November, Governor Mary Fallin announced that Oklahoma would reject federal funds under the Affordable Care Act (ACA) to expand Medicaid coverage for uninsured low-income adults, even though the federal government would assume 100 percent of the cost of this population for three years and 90 percent from 2020 onwards. This decision risks leaving well over 100,000 of the poorest and unhealthiest Oklahomans without health insurance options, stuck in a ‘coverage crater’, because they earn too little to qualify for federal tax credits to purchase coverage on new health insurance marketplaces, or exchanges. Oklahoma would be leaving over $8 billion in federal Medicaid dollars on the table over the next decade, while saddling hospitals and other health care providers with mounting uncompensated care costs.

continue reading Leavitt or Leave It: Consultant’s report suggests path for expanding health insurance coverage

In The Know is a daily synopsis of Oklahoma policy-related news and blogs. Inclusion of a story does not necessarily mean endorsement by the Oklahoma Policy Institute. You can sign up here to receive In The Know by e-mail.

Today you should know that the state’s $7.1 billion budget bill cleared the Senatate and is on its way to Gov. Fallin. The OK Policy Blog previously shared what you need to know about the state budget agreement. State revenue in April topped projections, bringing collections to about 1 percent above this time last year.

A proposed Oklahoma pop culture museum is getting more support and donations from entertainment industry stars, but it still waits for a bond issue from the Legislature. The OK Policy Blog discussed social impact bonds, a promising new approach that Oklahoma could use to fund smart on crime reforms. Voters in the Tulsa Public Schools district approved a $38 million bond issue that will provide every teacher with modern instructional technology and students with up-to-date computers. Public schools across the state would be able to “opt out” of many state mandates under a bill approved by the Oklahoma House. 

Civilians working for the U.S. Defense Department — including about 24,000 in Oklahoma — will be furloughed for 11 days beginning July 8. Multiple Oklahomans have been arrested after chaining themselves to equipment to block construction of the Keystone XL Pipeline through the state. Under threat of a lawsuit, a Muldrow high school removed 10 Commandments plaques from its classrooms. A map of hate speech on Twitter finds that it dramatically exceeds the national average in tweets coming out of Elk City and along the Oklahoma-Texas border.

The Number of the Day is the projected GDP growth over 10 years if the U.S. granted resident immigrants legal status and a pathway to citizenship. In today’s Policy Note, Wonkblog discusses new Congressional Budget Office projections that the U.S. deficit problem is solved for the next 10 years.

continue reading In The Know: Senate approves $7.1 billion budget bill

John Pearson is a retired executive in the worldwide logistics industry. He is chairman of the Oklahoma Partnership  for Successful Reentry, a statewide coalition of organizations working to help ex-felons reintegrate into society.

Social Impact bonds (SIB) are a promising new approach to government financing of social programs or social “interventions.”  By combining performance-based payments and market discipline, the approach has the potential to improve results, overcome barriers to social innovation, and encourage investment in cost-saving preventive services.  In Oklahoma, SIB’s could provide a funding source to provide assistance to the eight thousand plus individuals released annually by the Oklahoma Department of Corrections to transition from incarceration to becoming a successful employed neighbor.

continue reading Social impact bonds could fund smart on crime reforms (Guest Post: John Pearson)