‘Reinsurance’ Waiver Could Result In A Fee On Health Policies

July 27--With only one insurer willing to sell policies to Oklahomans on the Affordable Care Act exchange, the state is looking for a way to entice more companies into the marketplace.

According to an investigative report by Oklahoma Watch, the state is considering a "reinsurance" fee to raise as much as $350 million to help insurers offset some of the high costs of providing health coverage.

Even if the ACA is dismantled by Republicans in Washington, D.C., all proposed GOP plans include the reinsurance program, which allows states to seek federal waivers. If Oklahoma's waiver request is approved, it could take effect as soon as Jan. 1.

The Oklahoma State Department of Health reports that about 124,000 Oklahomans get their insurance coverage through plans purchased on the ACA exchange. The 1332 Task Force Concept Paper commissioned by the state claims a further 5,000 to 15,000 residents might buy coverage with the reinsurance waiver, and that premiums could drop by more than a third.

Area lawmakers were contacted about the legislation, but had trouble immediately recalling it.

"We were doing a lot that last week," said State Sen. Wayne Shaw, R-Grove. "We were trying to get a lot done."

State Sen. Wayne Pemberton, R-Muskogee, also did not specifically remember the waiver authorization, but said Oklahoma needs more than one company on the ACA marketplace.

"We only have Blue Cross Blue Shield, and they now pretty much dominate the market," he said. "Last year, they raised their premiums about 70 percent. They could pretty much charge what they wanted and we had to accept it, or they might leave the exchange and Oklahoma wouldn't have any insurers. It is never good to have a monopoly. You need that free market aspect to bring premiums down."

Messages were left for Lauren Cusick of Blue Cross Blue Shield Oklahoma, but she had not returned calls by press time. A request for comment an a previous story also went unanswered.

Pemberton said there was a bill in the Oklahoma Legislature to allow residents to purchase health insurance polices from out of state, but it failed.

"I voted for it, but there was some question about whether a policy bought in Kansas or Missouri would meet the standards Oklahoma requires for coverage," he said. "I don't know if that question was answered, but it could have allowed people who didn't want cancer or maternity coverage to buy the health insurance they want, and 'buyer beware.' Maybe some in the Legislature didn't believe people were smart enough to handle 'buyer beware,' but if we want to drive down prices, we need competition."

Oklahoma Watch reports bipartisan support for the waiver, but it comes with a cost. Between 1.7 million and 1.9 million Oklahomans who have health insurance through employers or self-funded plans would pay an extra $60 per head per year, or $5 a month, on their policies, according to the concept paper. The fee would not be applied to those on Medicare and Medicaid.

The "1332 waiver" was included in the ACA and begun this year. A reinsurance fee was included for most insurers nationwide between 2014-'16, with the same purpose of creating a reimbursement pool.

Under Oklahoma's proposal, the federal government could add a further $244 million. Some states want to use general funds to pay for reinsurance, but Oklahoma has struggled with recent budget crises. Under the ACA or a GOP plan, employers and insurers would have the option of paying the expense themselves, but many would likely pass it to those covered.

On the last day of the 2017 state legislative session, lawmakers approved creation of a board to consult with insurers and ascertain how much money must be collected.

Oklahoma Watch reports that some opponents and businesses argue against requiring policy holders to pay fees to sell coverage to those who might otherwise be uninsured, but supporters say future savings on premiums will more than cover the fees.

A task force created by legislation passed in 2016 led to the concept paper outlining the state's plan to acquire the waiver.

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