Nov 5, 2011
This week Oklahoma held the fourth Joint Committee Meeting on the Federal Health Care Law for the purpose of studying how the state will respond to the federal mandate to create a state health insurance exchange.
While there seem to be few options available to us to avoid the creation of the Oklahoma Health Insurance Exchange, a proposal that was hotly contested in the last legislative session, the way forward for our state in this matter needs to be very carefully considered. The states are being told either they create the exchange (and do it soon) or the federal government will step in and do it for them. But is there any advantage at all to the states creating the mandated exchanges versus digging in their heels and waiting?
This policy brief dated Nov. 4 2011 from the Goldwater Institute is on the similar predicament as the one that Oklahoma finds itself but pertaining specifically to the state of Arizona.
The Goldwater Institute writes;
“While proponents claim that states should establish an exchange in order to fend off a federally established one and preserve state control, a review of the law and proposed regulations reveal that establishing an exchange will accomplish none of these objectives.”
Oklahoma legislators rejected the enabling legislation for the creation of an Oklahoma Health Insurance Exchange not once, but twice last session.
Oklahoma’s insurance exchange planning was handed to joint legislative committee after lawmakers were unable to come up with a bill they could agree on.The two Republican legislators leading the study group said they would be starting from scratch to learn what Oklahomans want to see from an insurance exchange. Both of the legislators are insurance agents. Their panel will hold a series of public meetings through the fall and report back to the legislature during the next session. http://www.healthinsurance.org/oklahoma-state-health-insurance-exchange
In order to create the Health Insurance Exchange states must pass legislation. Alternatively, the Exchange could be created by the Governor sidestepping the state legislature and issuing an executive order. This is the strategy being considered in Arizona where the state legislature also rejected fulfilling the federal health care reform by passing state legislation by Governor Jan Brewer.
The points made in this policy memo apply to Oklahoma as well.
Key takeaway points;
- The creation of a Health Insurance Exchange is critical to enforcing the individual mandate portion of the Patient Protection and Affordable Care Act (PPACA aka “Obamacare”)
- Whether the Exchange is state or federally created “exchanges are government-sanctioned cartels where only government-approved insurers can sell only government-approved insurance.”
- The states will not gain any more control or flexibility by creating the exchange itself.