Representatives of consultant Leavitt Partners present their final recommendations on setting up an Oklahoma plan to cover people without health insurance. Credit: Warren Vieth / Oklahoma Watch

State government could expand health coverage to 200,000 or more lower-income residents and save itself more than $400 million over 10 years by developing a model program relying mainly on private insurers and federal subsidies.

Those are among the key findings of Leavitt Partners, a Utah-based consulting firm hired by the state to explore alternatives to the Obama administration’s proposed Medicaid expansion, which Gov. Mary Fallin has rejected.

“It’s a very Oklahoma approach … leveraging (federal) funds to develop a program that best meets the needs of your state,” said Laura Summers, director of state intelligence for Leavitt Partners.

Link: Highlights from Leavitt Partners report

Leavitt’s recommendations, presented Thursday to the Oklahoma Health Care Authority, might provide Fallin with a way to expand health-care coverage for the poor without appearing to reverse her earlier decision to forego the Obama plan.

Alex Weintz, press secretary for Fallin, said the governor would review the Leavitt proposal with legislative leaders “to explore where consensus can be found and how the state can best move forward.”

The Leavitt group gave high marks to the state’s existing Medicaid program for the poor, called SoonerCare, which it said “provides good health care coverage to approximately one quarter of Oklahoma’s population.”

Nearly 1 million Oklahomans are enrolled in SoonerCare. But it is not open to working-age adults with no dependent children, and its income limits for parents are considerably lower than those proposed by the Obama administration.

The state oversees another program called Insure Oklahoma, which helps provide health coverage to about 30,000 state residents by combining federal, state, employer and participant contributions.

The future of Insure Oklahoma is in doubt because the federal government has refused to continue funding it as currently structured. Unless the state can obtain a waiver, which so far it has been unable to do, Insure Oklahoma will be terminated on Dec. 31.

The Leavitt proposal would require the state to seek approval to develop a demonstration program to provide coverage to an estimated 200,000 or more people who currently do not participate in either SoonerCare or Insure Oklahoma.

The proposal would rely on federal funds and tax credits to steer as many people as possible into health insurance plans obtained through the new federal health exchange that will take effect next year or through the Insure Oklahoma plan, if it still exists.

The model program probably could not take effect before 2015, the Leavitt group said. Because of that, the state would need temporary federal approval to continue Insure Oklahoma through 2014.

The Leavitt proposal would require the state to seek approval to develop a demonstration program using Insure Oklahoma as a model to provide coverage to an estimated 200,000 or more people who currently do not participate in either SoonerCare or Insure Oklahoma.

Besides making health insurance available to new enrollees, the Leavitt plan envisions that about 26,000 people currently participating in SoonerCare would shift into private insurance plans, Summers said.

Over 10 years, the number of new enrollees would range from 204,911 to 257,493, the firm projected. The total additional cost of the expanded coverage would range from $10.5 billion to $13.3 billion.

The bulk of the additional cost would be borne by the federal government. Leavitt Partners estimated the program would actually save the state money over 10 years after taking into account benefits that would accrue throughout state government.

Net savings to the state would range from $447 million to $486 million over 10 years, the firm projected.

“We believe there are some real opportunities for the state of Oklahoma here,” said Leavitt Partners Senior Advisor Michael Deily. “You have a chance to try out some really innovative ideas … at very little risk to the state.”

The firm estimated total benefits to the Oklahoma economy of $13.6 billion to $17.3 billion over 10 years. Those estimates include the indirect effects of the influx of additional federal spending in Oklahoma.

Health Care Authority Board Chairman Charles McFall thanked the group for its recommendations and indicated that the agency was receptive to its proposal.

“We, the board and our staff, certainly stand ready to put these suggestions into motion and get things moving in the right direction,” McFall said.

Health Care Authority CEO Nico Gomez said, “The next step for us is to take this to state leadership, give them a chance to review it and ask questions … and see where we go from here.”

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