Insure Oklahoma: Overview and Impact

I. Overview: Insure Oklahoma was enacted in 2004 and began operations in 2005 to provide premium subsidies to small employers (2-50) with low wage workers. Through the program, the employer pays only 25% of the premium of the low-wage worker, the employee pays up to 15% of the premium and the state pays the remainder. Originally, low-income was defined as 185% of the federal poverty level (FPL) but in November 2007 the cap was increased to 200% FPL.

The program's passage was supported by insurers, small employers, hospitals, and doctors. It is funded by a new tobacco tax and federal funds based on a Medicaid Health Insurance Flexibility and Accountability waiver.

II. Impact: A new survey of 400 employers participating in Insure Oklahoma underscores the program's success and demonstrates that 95% of participating employers would recommend it to a colleague. Since its inception, Insure Oklahoma has:

Decreased the Uninsured: 9,923 employees and dependents are now directly subsidized by Insure Oklahoma – Up 234% in the last year. According to the recent survey:

56% of overall Insure Oklahoma enrollees were previously uninsured
36% of enrollees were previously uninsured in Insure Oklahoma employers that had offered coverage prior to the program.

Expanded Insurance Coverage Among Small Employers: 3,270 employers are now approved for the program – Up 187% in the last year. Insure Oklahoma has helped employers:

Offer coverage for the first time: 37% of Insure Oklahoma employers are offering coverage for first time and 55% of very small (<5) employers are offering for the first time. 90% of participating employers credit Insure Oklahoma as "one of the most or the most" important factors in their decision to offer coverage.
Retain Coverage: Even employers that had previously offered coverage were helped by Insure Oklahoma. 25% of participating employers had considered dropping coverage before Insure Oklahoma and 43% of very small employers (<5) considered dropping coverage before Insure Oklahoma.

Functioned Well without New Bureaucracy: Employers apply directly to an existing state agency (the Oklahoma Health Care Authority that oversees Medicaid).

Small employers (2-50) with eligible employees (household income under 200% FPL) are eligible for premium subsidies for their low-income employees. Small employers are eligible whether or not they currently have a health plan.
Small employers, low-income employees, and the state share responsibility for the premium: Employers pay 25% of premium for low-income enrollees; the low-income employee pays up to 15% (capped at 3% of household income); and the state pays the remainder, including 85% of cost for the spouses of low-income employees. Employers can have the subsidy direct deposited into their accounts.

Leveraged Employer Subsidies for Greatest Impact: All workers – not just those receiving state subsidies – benefit when small firms offer coverage for the first time. Many Insure Oklahoma firms newly offering coverage are composed of low-income employees that are directly subsidized by the program, as well as employees ineligible for the subsidy. These ineligible employees still benefit from the program because it enables their employer to offer coverage for the first time by highly subsidizing low-wage workers. According to a recent survey, for every employee directly subsidized by Insure Oklahoma there are 1.4 ineligible for the state subsidy that are benefiting from being offered employer coverage for the first time.

Maximized Market-Based Choice for Small Employers

Small employers choose coverage from insurers' regular small group products. Products must include coverage of hospital, doctor, pharmacy and the maximum out of pocket expense per individual cannot exceed $3,000. Small employers select coverage that best meets their needs and the market determines product offerings – not a government organization.
Twenty insurers participate, offering dozens of qualified products that are "off the shelf" products that did not require additional expense to create solely for Insure Oklahoma. Participating insurers and their qualified products are listed on the Insure Oklahoma website (www.insureoklahoma.org) for easy identification by small employers.
Insure Oklahoma (PPT)