SB 478​ would roll back autism coverage, allow worthless plans disguised as insurance​

For years, families caring for ​children with autism fought for a state law that would require insurers to cover the necessary treatments for their child. Last year, with the passage of HB 2962, Oklahoma became the 44th state to require meaningful autism coverage with HB 2962. Rep. Jason Nelson (R-Oklahoma City), the bill’s author, called it a “life-changing law” and said he was “happy to have played a small part in helping these families access the vital autism therapies and treatments their children need.” 

That was then. This year, lawmakers have introduced a bill that would undo that hard fought victory, and bring many other bad consequences for Oklahomans who need health care. SB 478 by Sen. Bill Brown (R-Broken Arrow) and Rep. Lewis Moore (R-Arcadia) would exempt insurers from all state mandates on their product, including autism coverage. By allowing both in- and out-of-state insurers to sell coverage that doesn’t comply with Oklahoma’s required insurance benefits, SB 478 would leave Oklahoma enrollees exposed to significant risk while increasing the costs and premiums for families who need or want more comprehensive coverage. Here’s how.

The health coverage insurers would be able to sell would be cheap. It would also be useless.

With the state’s required health benefits no longer required, health insurers would be free to sell much skimpier plans. These plans might initially be less expensive for consumers to purchase, but they would be useless for many people who become sick or develop chronic medical conditions. Health insurance that doesn’t cover mammograms – which SB 478 would allow – may seem like a good deal until one finds a lump. SB 478 would allow insurers to duck covering diabetes treatment, post-partum maternity coverage, cancer treatments, care for severe mental illness, and much more. No one is healthy forever, including the people who’d buy skimpier coverage. And because SB 478 doesn’t require insurers to detail what health care they won’t cover, many families will have little way of knowing what they’re signing up for.

In addition, Oklahoma law prohibits insurers from discriminating against victims of domestic violence. Under SB 478, insurers would be free to deny claims and drop coverage for victims of domestic violence.

The health insurance products created by SB 478 wouldn’t count as health coverage under federal law.

Under federal law, health insurance has to meet certain qualifications, including covering essential health benefits, to actually count as health insurance. Non-group coverage that meets those qualifications can be purchased on healthcare.gov, and most enrollees get federal tax credits to make that coverage affordable. In Oklahoma in 2016, most Healthcare.gov enrollees got a tax credit that reduced their average yearly premiums from $24,000 to just $960. More than half of Oklahoma enrollees got additional subsidies averaging over $1,100 per year to help cover deductibles and co-pays.

The coverage would be allowed to sell under SB 478 wouldn’t qualify for any of the assistance described above. Furthermore, most people who are uninsured or whose coverage doesn’t meet federal qualifications have to pay a fine when they file their taxes. So while premiums for skimpier coverage might be lower, enrollees would still have to pay a federal tax penalty – and would be on the hook for any unexpected health care costs their insurer wouldn’t cover as well.

The health insurance products created by SB 478 would make comprehensive coverage more expensive for the families who need it.

SB 478 undermines the central premise of health insurance risk pools: spreading risk across a broad and diverse population. The Oklahomans who would purchase the skimpier coverage created by SB 478 would likely be younger and healthier people who believe they won’t need comprehensive coverage. As a result, coverage in Oklahoma’s nongroup market would effectively self-select into two groups – those enrolling in cheaper, skimpier coverage, and those enrolling in more expensive but comprehensive qualified health plans. With enrollment in the state’s more comprehensive plans largely limited to enrollees who need more expensive coverage, premiums for those plans would rise accordingly. Although their premium subsidies would insulate most enrollees from rising costs, enrollees who qualify for less help purchasing coverage could find themselves forced out.

Much like SQ 777 would have done for the agriculture industry, SB 478 would make it very difficult for lawmakers to enforce laws protecting Oklahoma insurers from any harmful practices of the insurance industry. Voters overwhelmingly rejected SQ 777 for good reason, and lawmakers should do the same with SB 478.

The bottom line

Given that it would destabilize the state’s nongroup market, drive up premiums for better coverage, and expose enrollees to significant risk, SB 478 is a bad deal for Oklahoma. If the bill’s supporters hope to bring down Oklahoma’s uninsured rates and make coverage more affordable, they have more effective options available. Any effort on the state’s part to convince Oklahomans – particularly younger, healthier ones – to enroll in coverage would bring costs down. Making real coverage available to low-income working adults by expanding Medicaid would reduce premiums for everyone. 

We have good options for making affordable health coverage more accessible for Oklahoma families. SB 478 isn’t one of them.