As the industry keeps changing, it's important to know a company's "pedigree."
Nov. 16-- Gov. Mary Fallin is expected to announce soon whether Oklahoma will have any role in a health insurance exchange to facilitate the federal Affordable Care Act -- a hot-button political decision with legal, economic and health implications.
The issue is an incredibly complex one, so perhaps a brief step back is in order.
A health insurance exchange is an electronic supermarket for medical coverage. It's a free-market idea that was created by the conservative Heritage Foundation long before the Affordable Care Act became law.
Consumers would go there to compare prices and services and make purchases.
The federal health-care law co-opted the idea and added several elements, all of which are much more controversial than the basic idea.
People who earn up to 133 percent of the federal poverty level -- currently $30,657 for a family of four -- would go there to be directed onto an expanded version of Medicaid, if Fallin chooses to pursue that option.
If they do not receive insurance through their employer, people who earn between 133 percent of the poverty level and up to 400 percent -- $92,200 for a family of four -- would be able to buy health insurance that meets Affordable Care Act minimum standards and receive a federal subsidy to help with the cost. The subsidy is graduated according to household income and varies according to a handful of factors, including age.
A 45-year-old single-person family earning at the top end of the eligibility standards would get an estimated subsidy of $1,237 a year. At the lower end of the income standards, a person of the same age would get a subsidy of $5,137.
Many employers who do not offer qualifying health insurance are subject to stiff taxes if any of their workers obtain health insurance through an exchange -- one of the main ways the system is financed.
Exchanges -- one for each state -- are integral to the Affordable Care Act, and that has made them a target for opponents of "Obamacare."
Under the law, each state can either build its own exchange or the federal government will impose one on it. Subsequently, federal officials floated a third option, a state-federal partnership with split responsibilities.
When she first came into office, Fallin agreed to accept a $54 million federal grant to help build a state exchange, but the plan came under harsh criticism, especially from tea party Republicans who saw it as a foot in the door for the federal law.
Fallin strongly opposed the federal law as a member of Congress, but had agreed to accept the money, arguing that it was better for the state to build its own exchange than have one imposed on it by the federal government.
After GOP legislative leaders couldn't pass bills aimed at creating the legal foundation for a state exchange in 2011, Fallin announced that she would not be accepting the federal grant.
After a year of studying the issue, legislators again made an attempt at an exchange, although one that clearly would not comply with the federal standards because it would only sell insurance to employers, thus eliminating access to federal subsidies for individuals. Again, the proposal wilted under the heat of tea party pressure.
Dan Ramsey, president and CEO of the Independent Agents of Oklahoma, said he assumed when the Legislature adjourned this year without dealing with the issue that the chances of an Oklahoma exchange were gone.
But Fallin's staff again raised the issue after the presidential election made it clear that the Affordable Care Act wasn't going to be erased by voters.
While the original federal deadline for state decisions on the issue was Friday, U.S. Health and Human Services Secretary Kathleen Sebelius announced last week that the deadline was being waived for states that were interested in a federal partnership, but Fallin's staff has indicated she will probably make an announcement late this week.
Ramsey said the state is very short on time to put together an exchange at this point, but there are still good reasons why insurance agents should push for a state-controlled exchange, including the right for the state to limit insurance sales to licensed agents and brokers.
Obamacare opponents are again pressuring the governor not to be part of an exchange.
Ronda Vuillemont-Smith, founder of the Tulsa 9-12 Project, was a leader of past efforts to lobby lawmakers against exchanges, and she is again rallying forces to call the governor's office on the issue.
An exchange is the "cornerstone of Obamacare" and building one is the beginning of compliance with a law that the state should continue to resist, she said.
If the state establishes an exchange and accepts expanded Medicaid money under the Affordable Care Act -- another issue Fallin faces -- it could encourage people who want "free stuff" to move to the state and encourage doctors to move out of the state, she said.
"We believe we need to stand with governors like Sam Brownback (of Kansas) and others who are saying no to the exchange and no to the Medicaid money," Vuillemont-Smith said.
Advocates of a health insurance exchange are also encouraging their supporters to call the governor's office.
The number for the governor's office is: 405-521-2342.
Vuillemont-Smith said she is also concerned that taking part in an exchange would undercut Attorney General Scott Pruitt's challenge to the legality of the Affordable Care Act.
Pruitt's challenge, which is currently pending in federal court in Muskogee, is premised by the fact that Oklahoma "has not established or elected to establish an exchange, and does not expect to do so." Pruitt argues that the Affordable Care Act specifies that taxes can only be levied against employers whose workers obtain insurance from a state exchange.
If Oklahoma builds an exchange, his issue becomes moot, although it isn't clear if the argument might survive if Fallin chose to enter into a partnership exchange with federal officials.
Teresa Burkett, a former intensive care unit nurse who founded the health care practice group of Tulsa'sConner & Winters law firm, said that if Fallin chooses to establish an exchange, the big winners would be people who fall within federal income guidelines who would have easy access to quality insurance with federal subsidies to help with the costs.
Insurance companies who would see their sales rise through the exchanges and the law's mandates for almost everyone to have health coverage would also be big winners, she said. "Wouldn't you like to have a business where the government helps people buy your services?" she said.
The big losers might be insurance brokers, whose role as insurance middlemen could disappear in an exchange and employers who are determined not to provide qualifying coverage to their workers, she said.
March 23, 2010: President Obama signs the Affordable Care Act into law. The law requires each state to establish a health insurance exchange, which will route people up to 133 percent of the federal poverty level to Medicaid and sell insurance to people who are over 133 percent of the federal poverty level, but not above 400 percent and can not obtain insurance otherwise. Insurance buyers going through an exchange are eligible for a federal subsidy.
Dec. 7, 2010: Gov. Brad Henry signs a state application for a U.S. Department of Health and Human Services grant to fund a state exchange.
Feb. 16, 2011: U.S. Department of Health and Human Services notifies state that it has been awarded a $54 million exchange grant.
Feb. 25, 2011: Gov. Mary Fallin and top legislative leaders announce that the state will accept the exchange grant. Although she says the federal law is unconstitutional, Fallin says the state needs to build an exchange to comply in case court challenges are unsuccessful.
March 31, 2011: Senate President Pro Tem Brian Bingman announces that a bill to give legal backing to the planned exchange would not be considered because it is too closely associated with President Obama's health-care initiative.
April 7, 2011: House Bill 1996, legislation intended to be the vehicle for a sanitized exchange, is initially passed and then killed in the Senate Retirement and Insurance Committee.
April 15, 2011: Fallin, Steele and Bingman announce details of a new state plan that rejects the $54 million grant and plans a much smaller exchange, funded mostly or completely with private money. Legislation for that plan never makes it out of a legislative committee.
Sept. 14, 2011: Joint House-Senate committee begins hearings on a state response to the Affordable Care Act, including exchange options.
Feb. 22: Legislative committee recommends establishing state exchange that does not comply with federal standard. Proposed exchange would not sell insurance to individuals, meaning there would be no means for federal subsidies to be passed on to consumers.
March 8: Under pressure from tea party Republicans, Legislative leaders announce they will not pursue their plan for the non-compliant exchange.
May 25: Legislature adjourns without passing any legal structure for a state health insurance exchange.
Sept. 19: State Attorney General's office asserts in federal court filing: "Oklahoma has not established or elected to establish an exchange, and does not expect to do so."
What's your subsidy?
The Henry J. Kaiser Family Foundation of Menlo Park, Calif., has an online calculator for estimating premium subsidies under the Affordable Care Act.
The Kaiser calculator can be found at tulsaworld.com/subsidycalculator.
Wayne Greene 918-581-8308
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