Honorable Mary Fallin, Governor Program Director

Health Policy Analysis and Memorandum

Although the State of Oklahoma has made significant progress in overcoming the disparities in the provision of high quality health care services to all citizens, the state has not been immune from the same forces that are driving the costs of health care up throughout the nation. For example, the GOP's official Web site for its health care alternative to The Patient Protection and Affordable Care Act (hereinafter alternatively "Obamacare") emphasizes that, "Skyrocketing medical liability insurance rates have distorted the practice of medicine, routinely forcing doctors to order costly and often unnecessary tests to protect themselves from lawsuits, often referred to as 'defensive medicine'" (A plan for replacement, 2012, para. 2). The rejection of federal funds that would have assisted with the development of a health care exchange for the state which remains a work in progress, but the governor has allowed individual state agencies to apply for and receiving other types of funding through Obamacare.

The state's rejection of the full contingent of funds available through Obamacare is based on the governor's view that Obamacare will result in new taxes, unfunded mandates, increased bureaucracy and decreased patient choice (Campfield, 2012). This dynamic environment is further complicated by the imminent presidential elections and the mandates that will ensue thereafter as discussed further below.

Background:

This study is provided in response to your request for an analysis of the state's current health care system compared with at least two other alternatives. The costs associated with these initiatives have made this analysis both timely and relevant. The state's infant mortality rate is fully twice the national average, and many Oklahomans remain ineligible for or unable to afford private insurance or they do not receive it through their employers (State of the State's Health Report, 2012).

Landscape Identification:

The key stakeholders in this analysis are the three million Oklahoma citizens who continue to receive suboptimal health care services and the hundreds of thousands who are without any health care coverage at all. In a broader sense, the stakeholders include all American citizens since the state receives tens of millions of dollars in federal funding that is tied to compliance with federal mandates.

Alternatives Section:

The three alternatives considered in this analysis are the Patient Protection and Affordable Care Act, the Patient's Choice Act and the continuation of the state's current SoonerCare Choice health care insurance program as described further below.

The Patient Protection and Affordable Care Act ("Obamacare")

Proponents of the Patient Protection and Affordable Care Act maintain that the popularly termed "Obamacare" does not necessarily "represent a full national takeover of health insurance regulation and the pre-Obamacare world was not replete with state control" (Moncrieff, 2012, p. 288). Despite its purported across-the-board increases in the costs of health care, advocates of Obamacare even argue that the courts should "cut them some slack" because they mean so well. For instance, one analyst suggests that, "Obamacare strikes an eminently rational federalist balance, which deserves judicial deference" (Moncrieff, 2012, p. 289). Rather than forcing the decision whether to purchase health insurance down the throats of its citizens, Oklahoma provides free (but limited) health insurance for all qualifying citizens using a combination of federal and state funds and resources. For instance, Obamacare advocates "are uniting around proposals to vastly expand federal regulation of health insurance, require everyone to have coverage, and compel employers to provide federally prescribed insurance or pay a new tax. A new Medicare-like insurance plan is still being debated, but even if it doesn't make the cut, Congress could regulate its way to a government-dominated market" (Moncrieff, 2012, p. 290).

By contrast, critics argue that all provisions of the Patient Protection and Affordable Care Act actually increase the cost of providing care, although they "redistribute the burden of meeting the costs from subscribers to insurers, patients to providers, or one group of taxpayers to another. The key themes are redistribution of wealth, political and racial favoritism, and expansion of the welfare state" (Orient, 2011, p. 82). Fortunately, a more reasoned approach is provided by the Republican Party which is discussed further below.

Patients' Choice Act

A recent report from Turner and Antos (2011) emphasizes that Republican congressional leaders have developed a viable alternative to the Patient Protection and Affordable Care Act; although the goals (i.e., cover the uninsured, allow people to keep the coverage they have, provide more choices of affordable health insurance, and rein in health care costs) of both alternatives are similar, the policy approaches used differ significantly. The GOP's alternative to Obamacare was co-sponsored by four Republicans Congressmen,...

Tom Coburn (Oklahoma) and Richard Burr (North Carolina) and Reps. Paul Ryan (Wisconsin) and Devin Nunes (California) (Turner & Antos, 2009). The bill, known as the Patients' Choice Act, is intended to reduce federal centralization of health care administration. According to Turner and Antos, "It provides a path to universal coverage by redirecting current subsidies for health insurance to individuals. It also provides a new safety net that guarantees access to insurance for those with pre-existing conditions" (para. 2).
Side-by-Side Tables of the Alternatives:

A comparison of the three alternatives of interest to this analysis is provided in Table 1 below.

Table 1

Side-by-Side Tables of the Alternatives

Issue

Obamacare

Patients' Choice Act (GOP Alternative)

SoonerCare Choice ("Status Quo")

In-state purchase of health care coverage

In-state purchase only (A plan for replacement, 2012)

This plan will allow individuals to buy health care coverage outside of the state in which they live (A plan for replacement, 2012, para. 2). In addition, families would get $5,700 a year and individuals $2,300 to buy insurance and invest in Health Savings Accounts. Low-income Americans would get a supplemental debit card of up to $5,000 to help them purchase insurance and pay out-of-pocket costs. They would have an incentive to spend wisely since up to one-fourth of any unspent money in the accounts could be rolled over to the next year (Turner & Antos, 2009).

In-state purchase only (SoonerCare Benefit Comparison, 2012). State is also developing an online database of health insurance providers pursuant to the Oklahoma Health Care Information System Act to facilitate comparison of coverage for Oklahoma residents purchasing private insurance policies (Member handbook, 2011).

Abortion

In any insurance exchange, there will be at least one plan that provides coverage of abortion and at least one plan that does not. The federal premium subsidies are not to be used to bear the insurance risk for abortion (Orient, 2010, p. 82).

This plan will establish a government-wide prohibition on taxpayer funding of abortion and subsidies for insurance coverage that includes abortion. This prohibition would go further and enact into law what is known as the Hyde Amendment as well as ban other instances of federal subsidies for abortion services. The plan will also enact into law conscience protections for health care providers, including doctors, nurses, and hospitals (A plan for replacement, 2012, para. 2).

Patients under 21 years: Birth control information and supplies - Pap smears - Pregnancy tests

Adults 21 and over:

Birth control information and supplies - Pap smears - Pregnancy tests - Tubal ligations and vasectomies (SoonerCare Benefit Comparison, 2012).

Pre-existing conditions

Insurance companies are free to deny coverage for preexisting conditions (A plan for replacement, 2012, para. 2)

This plan will make it illegal for an insurance company to deny coverage to someone with prior coverage on the basis of a pre-existing condition (A plan for replacement, 2012, para. 2).

Generally yes, but some services may require medical documentation of necessity to qualify (Member handbook, 2011, p. 7). Eligible residents of Oklahoma can also apply for coverage through the state's Pre-Existing Condition Insurance Plan program run by the Oklahoma Health Insurance High Risk Pool (Pre-Existing Condition Insurance Plan: Oklahoma, 2012).

Health Savings Accounts

The new health care law prevents the use of these savings accounts to purchase over-the-counter medicine (A plan for replacement, 2012, para. 2).

Health Savings Accounts (HSAs) provide cost-effective health insurance to those who might otherwise go uninsured. The GOP alternative will improve HSAs by making it easier for patients with high-deductible health plans to use them to obtain access to quality care.

SoonerCare Choice is a primary care case Management (PCCM) program in which each member has a medical home. The medical home provider coordinates all health care services to qualifying Oklahomans (SoonerCare Choice, 2012). Covered health care services may include doctor visits, hospitalization and prescriptions (Member handbook, 2011, p. 9).

Recommendations:

The GOP's alternative health care approach, the Patients' Choice Act, has a number of features that are consistent with the governor's goals for the state. The GOP alternative is also congruent with the Oklahoma governor's published stance on abortion and is preferred by a majority of Oklahoma residents (Campfield, 2012). It is therefore recommended that the state support to GOP's alternative health care approach and implement it upon adoption as described further below.

Implementation Strategy:

The implementation of the GOP alternative should proceed in an incremental fashion to avoid any further loss of federal health care allocations in the future. Despite the previous rejection of $54 million in Affordable Care Act funds from federal health-care allocations in 2011, the fact remains that millions of dollars have been awarded to…