WHEN Gov. Mary Fallin announced that she wouldn't pursue Medicaid expansion or creation of a state-run health exchange, two key components of Obamacare, we said she should promote meaningful state-level reforms to address Oklahoma's very real health needs. Just because Obamacare isn't the answer doesn't mean the problem doesn't need a solution.
Fallin doesn't have to look far for ideas. A state House task force report issued in 2009, largely collecting dust since then, still contains some suggestions worth reviving.
In particular, several of the group's recommendations focused on Insure Oklahoma, a program that provides state matching funds to certain small businesses and individuals to help them buy private insurance. The program, funded with tobacco tax money, can typically cover a maximum of only 40,000 individuals, so the task force recommended identifying additional funds for the effort.
Taxes would not have to be raised. Lawmakers could redirect funds currently supporting other programs that provide less public benefit. Governing is about making choices based on a realistic cost-benefit analysis.
This isn't a perfect solution. Taxpayers would still be on the hook for some of the cost of covering the uninsured. But a program using some taxpayer funds while also requiring financial buy-in from private beneficiaries is preferable to the current system where the uninsured show up in the emergency room and pass on all of the cost of care to others. By requiring individuals to cover at least part of the cost of their coverage, Insure Oklahoma lowers the expense carried by other citizens and eases financial strain on hospitals.
Senate President Pro Tem Brian Bingman, R-Sapulpa, recently identified Insure Oklahoma as a focus for reform efforts next year. Sadly, other sensible recommendations proposed by the House task force may not be viable today because of the passage of Obamacare. The report encouraged greater use of flexible spending accounts, which allow employees to use pre-tax dollars to buy health insurance, noting employees have saved up to 26 percent using the plans. The group also recommended expanded use of high-deductible plans paired with health savings accounts that give individuals greater personal control.
But under Obamacare, citizens can no longer use FSA dollars to buy over-the-counter drugs; they must get a prescription first. Starting in 2014, individuals won't be able to put more than $2,500 annually into an FSA and get a tax break. Currently, those accounts have no cap and can be used for big-ticket items such as a child's braces (which can cost around $7,000). Virginia-based Brown's Insurance Agency notes that this change “is most likely to affect parents who pay for daycare through an FSA. In other words, it hurts most for middle class folks on a budget.” The change is expected to especially penalize parents of children with special needs who could previously use FSA funds for their child's schooling.
Obamacare regulations also imperil high-deductible plans, with ripple effects on the viability of health savings accounts. The House task force also endorsed creation of a state-run health insurance exchange. Obamacare's subsequent exploitation of that concept made it politically toxic and a nonstarter.
Clearly, the Democratic version of health care reform has made true health care reform more difficult. This doesn't mean Fallin shouldn't try. Insure Oklahoma is a good starting point.