Recently, The Oklahoman criticized OK Policy for our opposition to a proposal under legislative consideration that would waive existing state laws that require insurance companies to provide coverage of basic health benefits as part of any policy for young adults. The editorial asserted that allowing insurance companies to offer “bare-bones coverage” would be an aggressive step in addressing the crisis of the uninsured in Oklahoma.
It’s helpful to begin by reviewing what is actually being considered. HB 2026, authored by Rep. Kris Steele, and HB 1038, authored by Rep. Doug Cox, would both allow insurance companies to offer health insurance products exempt from state benefit requirements in the individual market to persons under the age of 40. Oklahoma currently mandates coverage of about a dozen benefits. But more than half of these benefit requirements apply only for group coverage or for adults over the age of 40 (here’s an example of an apparent mandate that would be unaffected by these bills – coverage of routine obstetrical/gynecological exams is required only for group policies covering 50 employees or more).
The actual list of benefits deemed essential by the Legislature over the years that could be waived by young adults under HB 2026 and HB 1038 consists of the following: diabetes equipment, supplies and services; post-partum maternity care; child immunizations; inpatient care following breast cancer surgery; and dental anesthesia for children aged 8 and under and persons with severe disabilities. Most persons would agree that these are anything but frill or vanity benefits but rather core prevention and treatment services that are vital to ensuring an individual’s health.
A number of questions come to mind when looking at this list of benefits that could be waived. How much would the cost of insurance actually be lowered for policies that did not include these services? How many prospective parents would actually select a policy that did not provide a guarantee of 48 hours of inpatient care after delivery or children’s vaccines? Would the health of Oklahomans be promoted by allowing young people to select policies that would not cover them for test strips and insulin following the onset of diabetes?
The reality is that Oklahoma’s individual insurance market is already very flexible, so passage of these proposals would likely not have an earth-shattering impact one way or another. However, some young people would likely be attracted by a slightly cheaper price to select policies that could leave them critically underinsured if their health status worsened. And to the extent that people currently in good health were drawn to the “bare-bones” coverage, costs would end up rising for those in the risk pool whose health status obliged them to maintain comprehensive policies.
There are alternative approaches to covering more of the young uninsured, including allowing young adults to remain covered under their parents’ plans to a later age. It would be a shame if the Legislature were to pursue the goal of broadening the access to care at the cost of undermining the quality of care.
See this page of our website for more analysis on this issue.
Updates: The Oklahoman ran a letter to the editor from me responding to their editorial (scroll down). HB 1038 died in a Senate Committee but HB 2026 is alive and moving through the legislative process.