Does State Have Plans if Thousands Lose Insurance Subsidies?

Gov. Mary Fallin’s office won’t say if the state has a plan to help thousands of Oklahomans who might be priced out of health insurance if their subsidies are struck down by the U.S. Supreme Court this month.

However, an independent consulting firm is predicting Fallin would come under “immense” political pressure by Oklahomans unable to keep their insurance. Nevertheless, her options could be limited politically because of her previous stances against the Affordable Care Act program. The firm suggests she might try to obtain concessions from the Obama administration as the price of considering state action.

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The Henry J. Kaiser Family Foundation, using federal data, projects that 87,136 Oklahomans could lose their subsidies and their premiums could go up by 243 percent on average.

Leavitt Partners projects that as many as 208,000 Oklahomans would either lose insurance they’ve already obtained or drop out of the pool of people who might have bought it in the future. The firm estimates that the number of uninsured people in Oklahoma could increase by 153,000. Most of the impact would occur in 2016.

Founded by Mike Leavitt, former Health and Human Services secretary under President George W. Bush, the consulting firm predicts the state’s political leaders would face “immense pressure” by uninsured Oklahomans to gain back health coverage.

However, Leavitt analyst Austin Bordelon told Oklahoma Watch that the state’s options are politically limited by its previous hard-line stances against the Affordable Care Act.

“There is no way they would seek compliance under the options available today,” Bordelon said. “But if they were able to negotiate with (the Health and Human Services Department) to secure extractions under some requirements on some aspects of exchange operation — maybe it’s who operates the website or its organizational structure, or the decision-making body that runs it, or secure new options that bends the rules a little bit — for a state like Oklahoma, that is the only circumstance that we see a willingness to seek compliance.”

The Supreme Court is expected to rule by the end of June on the legality of federal health insurance subsidies provided to people in Oklahoma and at least 33 other states that opted not to create state-run “exchanges” under the Affordable Care Act of 2010, often called “Obamacare.”

The ruling could come as early as this week, although analysts expect it later this month.

Fallin’s office declined to tell Oklahoma Watch whether there is or isn’t a plan in place to do something about the Oklahomans who might lose their subsidies. However, her spokesman, Alex Weintz, confirmed that the subject is under active discussion.

“The governor has met with her senior health advisors and looked a number of options that the state might take if the Supreme Court strikes down the federal subsidies in Obamacare,” Weintz said. “We’re going to wait to see what the court does before we decide to pursue one, or any, of them.”

In a separate interview, Oklahoma Health Care Authority spokeswoman Jo Kilgore said the agency also is awaiting the court’s ruling before deciding how to respond.

“Until there’s a decision made, then we’ll just proceed, business as usual, as we have been,” Kilgore said. “Once a decision is handed down, we’ll determine at that time what we need to do. Anything else is speculation.”

The Health Care Authority administers Oklahoma’s Medicaid program, called SoonerCare. In addition to deciding not to operate its own health care marketplace, Fallin’s office also decided not to participate in an expansion of Oklahoma’s Medicaid program under the Affordable Care Act.

Fallin and Health Care Authority CEO Nico Gomez declined interview requests. Fallin is leaving on an extended trip to France, Germany and Italy.

In Tulsa, the Oklahoma Policy Institute said it thinks the best solution would occur in Washington, not Oklahoma City. The institute is an independent research group that advocates creation of a state-based health insurance and expansion of the state’s Medicaid program.

“If the court rules for the law’s challengers, the problem has a simple fix: Congress only needs to change three words in the law to allow subsidies to be issued for insurance purchased on the federal marketplace,” OKPolicy health care analyst Carly Putnam said in an email.

If that doesn’t happen, “state lawmakers must act to establish a state-based health insurance marketplace as soon as possible,” Putnam said. “To do otherwise puts hardworking Oklahomans’ access to lifesaving health care at stake. State leadership should put Oklahomans’ health and financial security above scoring political points.”

State Rep. Doug Cox, chairman of the House appropriations and budget health committee, said he was not aware of any concrete plan being discussed by top executive branch officials or key lawmakers.

“I think it’s a kind of wait-and-see attitude, unless there are discussions going on that I’m not aware of, and that is possible,” Cox, R-Grove, said.

Cox is an emergency room doctor in Grove, a town in Delaware County. He said he had witnessed firsthand what happens when uninsured poor people get sick or injured: They show up at the emergency room for treatment, and the cost is borne by hospitals and paying patients.

“I would hope that we would scramble to find a way to maybe include them into the Insure Oklahoma program or come up with some other way to enable them to continue their coverage. Otherwise, they’re going to be a burden on the system,” Cox said.

“I guess you could say they’re going to be a burden either way,” Cox continued. “But it may be less of a burden if we can give them a little bit of a subsidy and they can share in the costs, like Insure Oklahoma is designed to do. That’s less of a burden than them going totally uninsured and showing up for care.”

Cox said he had given some thought to proposing legislation, but so far had not.

“I have not come up with an answer that I thought would be politically acceptable at this point,” he said.

The Henry J. Kaiser Foundation bases its estimates of the number of Oklahomans who would lose insurance on federal state-by-state statistics of subsidized coverage.

Bordelon said Leavitt’s estimates were based on projections by the Urban Institute, which also suggested that nationwide health care insurance premiums might go up by 35 percent overall if the Supreme Court struck down the subsidies, due to loss of payers in the marketplace through 2016. The Rand Corp. estimates that premiums will go up 47 percent nationwide.

Even if the Supreme Court doesn’t strike down the subsidies, Affordable Care Act premiums are expected to go up next year in many states.

Insurers are proposing a wide range of rate adjustments for 2016. A study of eight states by research firm Avalere Health found that the overall average rate hike for “silver plans,” the most popular, was 5.8 percent. The proposals ranged from a 5.3-percent decline in Michigan to a 12-percent increase in Oregon. Oklahoma was not included in the study.