By ZIVA BRANSTETTER World Enterprise Editor and BARBARA HOBEROCK World Capitol Bureau on Sep 6, 2013, at 10:17 AM Updated on 9/06/13 at 3:00 PM
Federal officials have given Oklahoma a one-year extension of the popular Insure Oklahoma program, extending coverage to a group of the poorest residents in jeopardy of losing health care on Dec. 31.
The U.S. Department of Health and Human Services has approved a one-year extension of Insure Oklahoma, officials told the Tulsa World on Friday.
Gov. Mary Fallin discussed the extension during a 10:30 a.m. press conference, saying the agreement "is a big win for Oklahoma and the tens of thousands of adults and children who currently buy health insurance through Insure Oklahoma."
"These Oklahomans and their families can now rest easy knowing that they won't lose their insurance on Jan. 1," she said.
Insure Oklahoma subsidizes private health insurance for nearly 30,000 low-income workers and individuals. It was created in 2005 after state voters approved an increase in tobacco taxes to fund health-care improvements.
The program uses $50 million a year in state tobacco tax revenue, federal Medicaid money and employer contributions to subsidize private health insurance. It covers low-income individuals and employees whose employers take part in the program.
The Obama administration told Oklahoma this spring it would not renew the Medicaid waiver authorizing federal funds in the program because Insure Oklahoma did not meet requirements of the Affordable Care Act. Without a waiver extension, Insure Oklahoma was to expire at the end of the year.
The Department of Health and Human Services objected to the cap on the number of Insure Oklahoma participants. The program is limited to 35,000 people, according to the Oklahoma Health Care Authority.
Because Fallin rejected an expansion of Medicaid that accompanied the Affordable Care Act, thousands of the poorest Oklahomans -- those making about $12,000 a year or less – would have been ineligible for subsidies to purchase insurance under the new law.
Insure Oklahoma currently covers individuals and employees at or below 200 percent of the federal poverty level, just under $24,000 per year. Income requirements for those covered by Insure Oklahoma through their employers will not change under the extended program.
The extension allows people with incomes between 100 and 200 percent of the poverty level to be covered through the Affordable Care Act. The law allows individuals to shop for coverage through insurance “exchanges,” websites where consumers can compare costs and details of various plans.
Under this agreement, however, the state will not be able to recoup as much money in federal reimbursement as states that accepted the Medicaid expansion. A Supreme Court decision that upheld the Affordable Care Act made acceptance of the Medicaid expansion voluntary.
A report by the nonprofit Urban Institute found in the 25 states that rejected the Medicaid expansion, nearly 7 million adults under age 65 will be ineligible for coverage.
Medicaid is a program in which states and the federal government provide health care for children, people with disabilities and pregnant women. Most adults who do not fall into those categories do not qualify for the program and the expansion was intended to cover them in all 50 states.
Federal officials are not giving up hope that Fallin will change her mind and accept the expanded Medicaid funds.
Emma Sandoe, a spokeswoman for Health and Human Services, said in an email to the Tulsa World: “We look forward to working with Oklahoma and all other states in bringing a flexible, state-based approach to Medicaid coverage expansion and encourage the state to explore these options.
“We encourage all states to adopt the Medicaid funding made possible by the Affordable Care Act, which provides 100 percent federal funding for three years and never falls below 90 percent federal funding for people newly eligible for Medicaid,” Sandoe said.
Fallin has said accepting the expansion would cost the state too much and that federal officials could change terms of the expansion in the future.
Fallin spokesman Alex Weintz said the difference between Oklahoma's program and the Medicaid expansion is cost.
"Insure Oklahoma is a state-based program with an identifiable funding source and an enrollment cap. We know what it’s going to cost the state and we can prevent it from ballooning to a point where it bankrupts us our forces us to dramatically slash other services," Weintz said in an email.
"None of that can be said about Medicaid expansion under ObamaCare, which is an unaffordable and never-ending expansion of government."
A study that the state commissioned earlier this year found that about 200,000 adults in Oklahoma would be newly eligible for Medicaid under the federal expansion. The study, by the Leavitt Partners, estimated the state would receive $3.5 billion in federal funds over the next seven years by expanding Medicaid.
The expansion would cost the state $155 million during the same period, which would be offset by an estimated 16,000 new jobs, $495 million in new payroll taxes and $52 million in new state tax revenues.
The state currently has about 780,000 people on the state's Medicaid program, called SoonerCare. More than half are children and 17 percent are disabled or elderly adults.
In a statement, Oklahoma Democratic Party Chair Wallace Collins stated that Fallin "flip-flopped on her anti-health care agenda and asked the federal government for a one-year extension of Insure Oklahoma."
"We are relieved that Governor Fallin has asked President Obama for help, but if she had accepted the $54 million in federal dollars provided by the Affordable Care Act, for our state's health insurance exchange, then she would not have had to deal with this emergency at the 11th hour," Collins' statement said.
"We look forward to discussing options for implementing a long-term solution."
Democratic lawmakers had urged Fallin to consider legislation dealing with Insure Oklahoma during a special session that began this week. Fallin said she would not expand the session to deal with subjects other than tort reform.
During her press conference, Fallin said she hopes federal officials decide to allow the program to continue after the one-year extension expires.
Jerrod Shouse, state director of the National Federation of Independent Business, applauded Fallin for "going to bat for small business on this."
"This is a big relief for the small-business owners and employees who use Insure Oklahoma. Our members tell us that access to affordable health insurance is their No. 1 priority, and this extension gives small-business owners and their employees some extra breathing room," Shouse said.
Oklahoma has nearly 700,000 uninsured residents, ranking behind only four other states in number of uninsured. Enrollment under the Affordable Care Act is scheduled to begin Oct. 1 and continue for six months. Coverage is to start Jan. 1.
Under the law’s “individual mandate,” Americans are required to have insurance or pay a fine, unless they fall into several narrow exempt categories. The fine for individuals is $95 the first year and escalates to $695 in 2016.
