Tag Archives: John Doak

Letter to Congress on Replacing ACA

Dear Majority Leader McCarthy,

I offer the following comments and recommendations in response to your letter dated Dec. 2, 2016, as the House of Representatives moves forward with the repeal of the Affordable Care Act and offers meaningful healthcare policy suggestions that place the best interests of the consumer and the market ahead of continued government marketplace meddling.

As the Oklahoma Insurance Department surveys the private individual health insurance market in Oklahoma, it is apparent that consumers, insurers and providers are in a combined state of distress. We see the expected marketplace failings, because of government intervention, of limited competition and consumer choice in both benefit plans and provider networks that have led to ever-increasing premium costs. Consumer confusion and dissatisfaction is prevalent and is shared by other marketplace stakeholders.

It is time we start thinking differently and move toward more innovative solutions that are working in other countries. We don’t know what health insurance is going to look like in 10, 15 or 30 years. We have to start putting the processes in place at the state level to allow for real innovation in this sector, one that has been totally hampered by government intervention for decades. To that end, one thing that has recently come to our attention that we think would be of interest to everyone is contained in the attached memo [at the bottom of this article] from Dr. David M. Dror, chairman of the Micro Insurance Academy and executive chairman at Social Re Consulting (pvt) Ltd. The memo focuses specifically on “health insurance to the uninsured and lessons from delivering microinsurance in low-income settings in India, Asia and Africa.” This memo is an example of innovative thinking that we need to consider for certain microsegments of the population in the U.S. We need to look for new solutions similar to microinsurance that have yet to be considered in the U.S. but that are working in other countries.

The current landscape presents us with a real opportunity to examine the principles on which we want to base our health insurance markets. For far too long, health insurance has drifted away from traditional insurance concepts (like fortuity) and has turned into a cost-sharing program instead. It is no wonder that health insurance premiums are spiraling out of control when every health insurance policy is required to pay for a very costly menu of benefits without regard to preexisting conditions. Health insurers should be allowed to underwrite for fortuitous risk and should not be forced to assume known chronic claims. Imagine how much we would pay for auto insurance if the policy was required to pay for all damage occurring over the life of the vehicle and even before the coverage was effective.

We have in front of us now a chance to reject this creeping sentiment that health insurance is an entitlement rather than an insurance product.

For the nearly 300,000 eligible Oklahomans who look to the individual market for coverage — including many of the citizens of tribal governments — Congress must take action that (a) stabilizes the marketplace for policy year 2018; (b) returns to the states the flexibility to self-determine the scope and depth of insurance coverages that best serve the citizens; and (c) restores the regulatory authority to state insurance departments that protects consumer interests and enables issuers to deliver value-based, affordable policies that best serve their constituents. 

See also: Obamacare: Where Do We Stand Today?  

A free market, grounded in fair and limited regulatory oversight — which is predicated on constitutional freedoms and rights — presents the best possibility of delivering sustainable access and affordability in this marketplace going forward. As we move forward, a properly designed policy must target improvement of health outcomes along with control of healthcare costs, reduction of administrative and regulatory burdens and advanced system sustainability.

Marketplace Stabilization

Vice President Mike Pence and Speaker of the House Paul Ryan recently discussed their intentions to have a “smooth transition” to stabilize the health market. Their approach will marry the White House’s planned executive orders with legislative approaches to stabilize the market as our country begins to repeal and/or replace the disastrous ACA. This approach, formulated and led by Congress and the White House, will be difficult. The states stand ready to do their part to ensure the transition is as smooth as possible. Promises by the federal government under the Democrats’ control have placed this country on a very dangerous path that will take time to unwind through a budget-neutral approach. Saddling this burden on the citizens without the funds to back it up is reckless and irresponsible.

There would be no more significant signal by Congress and the new administration of their intent to stabilize markets than to fulfill the payment obligations made by the federal government under the ACA Risk Corridor program utilizing any existing money to avoid deficit spending. These promised safety valve payments are not bail-outs of insolvent companies but rather the fulfillment of a promise previously made to insurers. Further stabilization initiatives for carrier participation in policy year 2018 and beyond would include an immediate fix of the Special Enrollment Period (SEP) eligibility problem using robust verification and documentation criteria and waiting periods for market re-entry; repealing ACA fees (PCORI, HIT and FFM issuer fees) that will reduce consumer premiums; and providing a clear decision on how Advanced Premium Tax Credits (APTC) and the Cost Sharing Reduction (CSR) programs will be administered under a replacement program. These initiatives will mitigate market instability and future issuer exits.

Moving Forward Initiatives:

My colleagues on the regulatory and state government side will be enumerating multiple initiatives that have been identified as important components of a replacement package. The following list represents concepts and changes I believe are essential to the repair/replace effort that Congress will undertake:

  • Permit sale of insurance across state lines under state regulatory enforcement.
  • Adopt policies that expand the use of health savings accounts coupled with more affordable high-deductible health plans.
  • Repeal the federal individual and small-employer coverage mandates. Consider a meaningful continuous coverage premium discount or a surcharge and waiting period for interrupted coverage.
  • Allow states to pursue innovative healthcare delivery mechanisms including, telemedicine and the expansion of the technologically based Project ECHO for rural America.
  • Support transparency in pricing for medical delivery like the Surgery Center of Oklahoma has done by posting prices for elective procedures on its website.
  • A federally supported but state-administered combination reinsurance and high-risk pool program that addresses the risk management challenges of high-risk enrollees.
  • Permit employers to extend transitional “grandmother” group plans beyond the planned 2017 expiration as changes to the individual market are implemented.
  • Cap monetary damages that can be awarded in medical malpractice lawsuits.
  • Repeal rules on short-term health plans that limit policy duration.
  • Replace the 90-day premium grace period with state-based grace periods.
  • Eliminate the dual regulatory scheme currently existing at the federal and state levels. Return all regulatory authority to the states.
  • Provide flexibility through state-based innovative pathways using 1115 and 1332 waivers to create affordable health insurance coverages for the uninsured.
  • Implement market-based deadlines for submission of insurance rates and forms
  • Establish a federal initiative to sunset fee-for-service reimbursement and make the transition to value-based reimbursement payments.
  • Allow states to enact new health reforms at the grade-school level that incorporate physical fitness and nutrition programs to deter preventable illnesses.
  • Let states determine the age at which a child can remain on his or her parent’s group health plan.
  • Enact legislation that protects consumers from unfair balance billing and surprise billing.
  • Provide federal support to accelerate the interoperability of electronic health records (EHR).
  • Reform FAA rules to give states authority to regulate air ambulances.
  • Acknowledge the existence of and promote the protections surrounding religious-based medical-sharing networks similar to companies like Medi-Share, where premiums are significantly more affordable in exchange for limited network access.

See also: Is the ACA Repeal Taking Shape?  

I appreciate the opportunity to provide my thoughts on moving forward and advancing meaningful healthcare public policy. As an experienced regulator and conservative leader, I understand the challenges of balancing budgets and managing deficits. I urge the House to deliver immediate changes that will stabilize the individual market for policy year 2018 and to design long-term solutions that address competition and affordability to participants in the individual market.

The following is a briefing note from Social Re Consultancy for Mr. John D. Doak, Oklahoma insurance commissioner, on health insurance to the uninsured and lessons from delivering microinsurance in low-income settings in India, Asia and Africa. 

Who Is to Blame on Oklahoma Option?

I’ve been highly critical of the Oklahoma Option, the alternative workers’ compensation system that was recently found to be unconstitutional by that state’s Workers’ Compensation Commission. I’ve been critical of the backers of the system, as well as the employers that willingly set up plans in this closed and tightly controlled scheme. And while I’ve questioned how the Oklahoma Insurance Department, headed by Commissioner John Doak, could have approved plans so obviously deficient in comparison to those in the workers’ compensation system, I’ve never accused commissiioners of being otherwise involved. I just assumed it was stupidity, incompetence or slothfulness that allowed plans, required to provide benefits that are “equal to or better” than those provided under the workers’ comp laws of the state, to be approved for use when they were ultimately substandard.

That all changed last week, during the second opt-out session held during the 32nd WCRI Annual Issues & Research Conference. The speaker who changed my point of view was James Mills, director of workers’ compensation and captive insurance at the Oklahoma Insurance Department. Mills went on at length about how proud they were at OID to have developed a “powerful system with options” for employers in their state. I do not recall his mentioning that those options have been found to discriminate against their employees, and were therefore unconstitutional. He did not address that at all. In fact, he spoke so positively about Opt Out that he sounded to me just like the concept’s biggest promoter, Dallas attorney Bill Minick. He was just like Minick’s mini-me, or a mini-Minick, if you will. It became apparent from his presentation that the OID approvals were not borne of incompetence; no, the agency was instead directly culpable in the development and promotion of a scheme that creates discriminatory sub-classes of employees in the state.

See Also: Strategic Implications of the Oklahoma Option

Mini-Minick did not explain how plans that have draconian reporting requirements (most require an incident be reported in 24 hours or less, or all benefits may be denied) got approved when the state system allows for 30 days. He did not explain how plans that exclude a wide variety of injuries or conditions, like asbestos exposure or workplace violence, could be approved when the state system covers them. He did not explain how plans that do not even let an employee testify at an appeal of his denial could get by the OID. Frankly, there are many areas where the alternative plans come up short when compared with the state system, and mini-Minick didn’t explain any of them. He simply touted the OID’s desire to work to preserve these options for employers.

Clearly, Commissioner Doak appears to be a healthy proponent of the Oklahoma Option. This made clear to me why plans that have left everyone around the nation scratching their heads got approved in the first place. Of course, not every action may be intentional. There is obviously room for a little incompetence, as well. This is, after all the same insurance department that in 2012 issued an email announcement that an Insurance Commissioners Award for Tornado Awareness would be given to “the girl with the biggest [breasts].” (Seriously. Click here to read about it if you doubt me). Pesky details like proofreading emails or comparing benefit levels don’t appear to be a top priority in Doak’s department.

I suppose it is appropriate the agency is run by a man whose last name rhymes with the sound Homer Simpson makes when he is completely flummoxed.

I was speaking with some people at WCRI the morning following mini-Minick’s session when this topic came up. One of the people pointed out how employers always take the blame in situations like this, but that what they were doing was approved and legal. The problem was the legislative and regulatory environment that created the system to begin with. There is validity in that view, although the employers still should be held to account for the plans they adopted. “Because I could” was never an excuse that worked for me when I was in trouble as a child, and I suspect it will not be widely accepted in the public eye today (unless, maybe, you are Donald Trump, but that is another topic entirely).

See Also: The State of Workers’ Comp in 2016

For the failures of the Oklahoma Option, there is plenty of blame to go around, but a good deal of it apparently lies with the folks charged with watching the hen house. And it does not sound as though they understand their mistakes, which means they are likely destined to repeat them.