Arkansas, Oklahoma: No Plans to Move State Workers to Health Exchanges

As lawmakers in the state of Washington consider moving some part-time government workers out of a state-sponsored health plan and into an insurance exchange developed under the nation’s new health care overhaul law, officials in Oklahoma and Arkansas say there are no plans for a similar move those states.

Officials in Oklahoma have instead recommended that the Legislature make funding for a consumer-driven health insurance plan a funding priority for the state to give its workers and retirees more control over their health insurance needs and to stabilize health insurance costs.

Supporters of the shift in Washington believe their state could save $120 million over the next two years – though costs would be shifted to the federal government.

In Arkansas, lawmakers did not consider a move to exchanges for the state’s nearly 60,000 state workers in the recently concluded legislative session.

Arkansas’ health-care debate in 2013 instead included a battle over whether the state should use federal Medicaid money to buy private insurance for about 250,000 low-income residents. Before wrapping up their session, legislators approved the “private-option” plan, but the Obama administration still must give its approval.

Arkansas had 57,421 state employees as of Dec. 31, according to Nick Fuller, state budget manager in the budget office of the Department of Finance and Administration.

The state provides health benefits to 51,327 employees and dependents, said Doug Shackelford, interim deputy executive director of the Employee Benefits Division of the Department of Finance and Administration. Counting only workers, the number is 28,081, Shackelford said.

“We’ve got a lot going on,” said Trish Frazier, policy director for the 10,000-member Oklahoma Public Employees Association, which helped prepare a study of the employee insurance and benefit plan for state workers in Oklahoma.

The study makes no mention of directing state workers to an insurance exchange for the state that is being developed by the federal government, Frazier said.

The report, delivered to the Legislature and Gov. Mary Fallin’s office in December, states that declining state revenue has forced Oklahoma and other states to look for ways to cut costs, including the health-care costs for public employees.

It focuses on consumer-directed plans it says are designed to make employees more responsible for their health-care costs, except for catastrophic health expenses. Such plans reduce the cost of insurance because a smaller percentage of an employee’s medical bills are paid by the insurer and employees are more cautious about health care costs.

Successful consumer-directed health plans generally include a generous health savings account funded by the employer and employee that is used to pay day-to-day medical expenses and can be drawn on for other expenses after retirement as well as a high deductible, low-premium catastrophic insurance policy to cover large expenses.

The report also stresses smoking cessation programs already offered by some state health plans – and health insurance premium surcharges for those who smoke.

The report says at least nine states authorize lower premiums to non-smoking state employees and higher premiums for smokers. Currently, some health plans in Oklahoma have an increased deductible and out-of-pocket maximum of $250 per person for tobacco users and their families.

The report says tobacco use costs state health plans and their members approximately $52 million a year.