Small steps

Kudos to the Oklahoma Legislature and Insurance Commissioner Kim Holland for taking a small but worthwhile step in helping Oklahomans keep their health insurance. SB 553, authored by Sen. Ron Justice (R-Chickasha) in the Senate and sponsored by Rep. Leslie Osborn (R–Tuttle) of the House, expands the state’s “mini-COBRA” health insurance plan for the newly unemployed. The bill allows Oklahomans who have lost their jobs with small businesses to keep their health insurance for four months and receive a federal subsidy to help pay the premium. The bill has passed both houses and  is headed to Governor Brad Henry’s desk.

COBRA is a federal law that allows a person leaving a job to keep health insurance coverage through their former employer for up to 18 months, if the employee pays full monthly premiums plus an administrative charge. For those who can afford it, COBRA offers a way to keep the same insurance coverage while they seek other work or better insurance options. COBRA does not help all workers, however. Among other gaps, it applies only to firms with 20 or more employees.

Oklahoma and most other states created “mini-COBRA” laws to extend COBRA-like rights to employees of smaller firms. However, most mini-COBRAs are more restrictive than the federal one and Oklahoma’s is amongst the most restrictive of all. Employees are entitled to coverage for only one month after they leave a job.

The American Recovery and Reinvestment Act of 2009 (ARRA, better known as the stimulus bill) can help people who have lost their jobs by paying 65 percent of their COBRA or mini-COBRA premiums for up to nine months or for any mini-COBRA benefits for which they are eligible. Together, this provision of the stimulus, COBRA, and mini-COBRA help more unemployed people keep the health coverage they need with minimal, if any cost to Oklahoma government and businesses.

SB 553, extends mini-COBRA coverage from one month to two. Additionally, it temporarily extends coverage to four months as long as the ARRA premium subsidy is available. The bill also broadens participation in the state’s high-risk insurance pool to include people who have used up their COBRA benefits. This could provide them another insurance option, but one that is costly and is not eligible for the ARRA COBRA subsidy.

In spite of the gains we can make with SB 553, there is still much Oklahoma can and should do to improve health insurance coverage. According to the Henry J. Kaiser Family Foundation, Oklahoma ranked eighth in the nation in percentage of the population without health insurance in 2006-07. The problem is particularly acute for the unemployed. While 82 percent of Oklahoma non-elderly households with at least one full-time worker have health insurance coverage, only 68 percent of those without workers are insured. Federal insurance reforms will be necessary to make coverage affordable to a substantial proportion of the unemployed population. FamiliesUSA, a national organization dedicated to improving health insurance coverage, has suggested steps Oklahoma can take to improve insurance options for the unemployed. These include:

• Revisiting the SB553 provision that extends the coverage to four months only as long as ARRA subsidies are in effect. Workers laid off by small businesses should have access to coverage if they can afford it without the stimulus subsidy.
• Expand mini-COBRA coverage so that people leaving jobs in small firms can continue insurance coverage for the same 18 month period as people leaving larger companies.
• Provide stronger “conversion policies” for people who have left jobs from companies that drop insurance coverage or go out of business.
• Lower premiums for the high-risk pool. The high-risk premium can be up to 1.5 times the cost of standard coverage on the private market. Oklahoma provides no premium subsidy for low-income participants; six states offer such a subsidy.
• Extend the Medicaid program to cover more low-income unemployed persons, as discussed in our issue brief.

Oklahoma’s Legislature has stepped up to help unemployed citizens immediately by extending the period in which they can keep coverage under mini-COBRA. While the health insurance issue in our country can seem overwhelming, this is a great example of how we can make incremental progress while pointing toward bigger reforms in the future.