Affordable Care actions put Oklahomans last
BY DAVID BLATT
Friday, December 21, 2012
12/21/12 at 3:23 AM
Read the Tulsa World continuing coverage of the health care law.
Even though hundreds of thousands of Oklahomans without health insurance stand to benefit from the Affordable Care Act, state officials continue to treat the law like a political football.
Just before Thanksgiving, Governor Mary Fallin declared that Oklahoma would not participate in the expansion of Medicaid for low-income adults and would not create a state-run market for private health insurance.
She has also embraced Attorney General Scott Pruitt's effort to deprive Oklahomans of tax credits that would make private health care coverage more affordable.
Fallin's and Pruitt's actions take aim at the heart of the Affordable Care Act, which provides two main mechanisms to extend health insurance coverage to the 48 million Americans, and 694,000 Oklahomans, who are currently uninsured.
The first is extending Medicaid coverage to working-age adults with annual incomes below roughly $30,000 for a family of four. Medicaid is a joint federal-state program; to encourage state participation in the expansion of coverage, the federal government committed to paying between 90 and 100 percent of the cost of these newly eligible Medicaid participants.
Unfortunately, refusing to expand Medicaid slams the door on uninsured Oklahomans who have incomes below the poverty level but still earn too much to qualify for traditional Medicaid. Roughly 150,000 Oklahomans will be stuck in a huge "coverage crater," without access to private coverage or public support. Instead, Oklahomans' federal tax dollars will go instead to pay for health care for Californians and New Yorkers.
This decision is also a major blow to Oklahoma's health care providers, who will remain stuck with the crippling costs of uncompensated care, which ultimately get shifted to all of us in the form of higher health insurance premiums.
The second coverage mechanism provides tax credits to help make coverage more affordable for those with income between roughly $23,000 and $92,000 for a family of four. The credits will help them pay premiums for private insurance purchased through newly-created health insurance exchanges, which are online marketplaces where individuals and small businesses will choose between competing private insurance plans.
States were given the option of creating and administering their own exchanges or having the federal government do so. Governor Fallin's decision to opt out simply means that eligible individuals and families will use their tax credits to purchase insurance on an exchange built and operated by the federal government. They will have access to the same range of insurance products, receive the same subsidy, enjoy the same consumer protections, and be subject to the same cost-sharing responsibilities as if Oklahoma were operating the exchange.
For the consumer, then, the Governor's exchange decision will have minimal consequences - with one notable caveat: Pruitt's lawsuit.
Pruitt argues that certain sections of the Affordable Care Act prohibit credits from being used on a federally-operated exchange. Yet the state is on extremely weak legal footing. Many sections of the law, as well as the bill's legislative history, establish that federal exchanges can offer tax credits. In addition, the Treasury Department has issued regulations to implement tax credits on federal as well as state exchanges, and the courts are likely to defer to the agency's interpretation of the law.
Still, as the federal government asserted in its motion to dismiss Pruitt's lawsuit, the state's position "is directly adverse to the approximately 381,500 Oklahoma residents who will receive a premium tax credit under the act, but who would not if Oklahoma were to prevail in this suit."
It is unfortunate that the attorney general, supported by the governor, would choose to pursue a lawsuit so contrary to the interests of Oklahomans. We can only hope that it is dismissed quickly and the state pursues a new direction on exchanges and Medicaid that puts Oklahomans and Oklahoma health-care providers first.
Blatt is Director of the Oklahoma Policy Institute, okpolicy.org.
David Blatt: This decision is also a major blow to Oklahoma's health-care providers