Oklahoma Policy Institute: State not on path to create own health exchange (eCapitol)

by Justin Martino, eCapitol

(eCap) According to David Blatt, director of the Oklahoma Policy Institute, Oklahoma is not on the path to show sufficient adequate progress in creating a state insurance exchange by January 2013.

On a list of core areas of basic minimum requirements of which the federal government requires a state to show readiness, Oklahoma is showing sufficient progress only in the area of background research. In other areas, such as legislative action, financial management and stakeholder consultation, Oklahoma is showing limited progress at the moment.

Blatt’s presentation was part of an all-day meeting of the Joint Committee on Federal Health Care Law, which met Wednesday in the Senate Chamber at the state Capitol. [Editor’s note: See related story on the committee’s meeting.]

Oklahoma must have a plan in place for a state-run exchange by January 2013, giving the state about 14 months to make the necessary progress. If Oklahoma does not have an adequate plan, the federal government will create a health exchange in Oklahoma.

Blatt mentioned several areas in which Oklahoma has shown little progress, including legislative and regulatory action. Although the state attempted to pass two different bills that would have created a board to research creating a health insurance exchange in 2011, neither bill passed out of the Legislature.

HB 2130, by House Speaker Kris Steele, R-Shawnee, and Sen. Clark Jolley, R-Edmond, provides for members of the Health Care for the Uninsured Board and provides that the board will hold its first meeting no later than Dec. 15, 2011. It directs the secretary of health and human services to act as the Health Care for the Uninsured Board executive director. It removes reference to the Oklahoma Insurance Department and Oklahoma Health Care Authority. The bill expands the board’s duties to include applying for grants or other federal Medicaid funds to implement the provisions of the Health Care for Oklahomans Act and to establish a system of counseling, including a website, for individuals without health insurance who are not covered by Medicaid. The bill also expands the duties of the insurance commissioner to include establishment of a system for the certification of low-cost health insurance programs designed to provide coverage to certain individuals and that the program will not be required to meet certain mandates. The bill provides that the board may recommend that plans certified by the commissioner be offered statewide to eligible individuals. It states that the HUB is not to receive general revenue appropriations but be funded by grants awarded to the state.

The bill was approved by the House but not heard by the Senate, which resulted in Oklahoma declining the federal early innovator grant. A second bill was filed that would require the exchange to be funded by state and private dollars.

SB 971, by Jolley, Sen. David Myers, R-Ponca City, Rep. Scott Martin, R-Norman, and Rep. Earl Sears, R-Bartlesville, establishes the Health Insurance Private Enterprise Network as a state-beneficiary public trust. It states that the network will be governed by a seven-member board of directors, comprised of one member appointed by the governor representing health insurance carriers granted a certificate of authority by the Oklahoma Insurance Department; one member appointed by the House speaker representing consumers who has purchased or is reasonably expected to purchase policies through the network; one member appointed by the governor who shall be a health care provider’ one member appointed by the governor who shall be a representative of employer groups; one member by the Senate president pro tempore who shall be an insurance agent or broker; the insurance commissioner and the secretary of health and human services. It requires the insurance commissioner to serve as chair of the board. It requires the board to appoint an executive director.

The measure also grants the network the minimum authority under state law that is necessary to avoid the establishment of a federal exchange. It requires the network’s funding to come from state and private sources. It establishes the purpose of the network to increase choice and competition in the health insurance market of Oklahoma. It prohibits the network from exercising regulatory authority over any entity, discriminating against any qualified health insurance carrier willing to participate in the network or supplanting any marketplace outside the network. It requires the network board to establish a system of certification for insurance programs offered in the state to be offered by the network and establish a system for credentialing licensed insurance producers who intend to market insurance programs certified by the state. It removes language relating to duties of the network board. It requires all personal information generated through the purchase of any policy purchased through the network to remain confidential between the insurer and the insured. It requires the network board to promulgate rules as necessary to implement the purposes of the act.

SB 971 never received a hearing in the Senate. Instead, legislative leaders decided to step back and study the issue over the interim through the committee that met Wednesday.

Blatt added that even if the two bills had passed, they did not include all of the necessary provisions to meet federal requirements.

Blatt also discussed the issue of stakeholder consultation, another requirement to show progress in creating a health insurance exchange. Although Oklahoma received an exchange planning grant to help facilitate the process, he said in recent months the planning process has come to a “screeching halt,” with the last stakeholder meeting being held about seven months ago.

Oklahoma has also shown little progress in creating an information technology system for a health insurance exchange. Although the state received a $54 million Early Innovator Grant from the federal government that would have been used to obtain the necessary technology, the state chose to decline the grant funds.

If the federal government sets up a health insurance exchange in Oklahoma because the state has not shown adequate progress, Blatt said Oklahoma would face several disadvantages, including the loss of regulatory authority and ability to design the exchange on the state’s own terms to create one uniquely suited to Oklahoma’s residents.

The Oklahoma Policy Institute also released a report Wednesday stating that projections that the federal Patient Protection and Affordable Care Act will cost billions of dollars are “way out of line” with other studies and based on mistaken assumptions and methodologies.

According to the report, the fiscal impact of the act will be between $200 and $800 million between 2014 and 2020, adding that several studies that looked at a broader range of costs, savings and revenue factors have projected the cost will be even less and could yield net savings.

“We think that anyone who looks carefully at the assumptions and calculations of the various studies will agree that the federal government is on the hook for the lion’s share of the cost of health care reform,” Blatt stated in a release. “Although we cannot precisely calculate the fiscal impact of the Affordable Care Act, the fact that the federal government will take over funding responsibility for functions now borne by the state, such as health care for adults with mental illness, will help the state budget and offset some of the expense of a larger Medicaid population.”


Oklahoma Policy Insititute (OK Policy) advances equitable and fiscally responsible policies that expand opportunity for all Oklahomans through non-partisan research, analysis, and advocacy.

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