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Private-Public Plan Expands Health Insurance for Small-Business Workers

By Ben Weyl, CQ Staff

September 26, 2008 -- In what could serve as a model for future public–private partnerships, a leading insurance company says it has successfully teamed up with two state governments to provide health insurance for small businesses.

At a Capitol Hill briefing this week, Blue Cross Blue Shield Association (BCBSA) unveiled a study showing that premium subsidy programs it has developed in Oklahoma and Arizona have increased the number of insured workers.

"Innovative solutions such as programs in Arizona and Oklahoma have increased access for thousands of workers in small firms who otherwise would not be able to afford coverage," said BCBSA president and CEO Scott P. Serota in a press release. "Small businesses and their workers are the backbone of our nation's economy and addressing their needs must be a top priority for health care reform."

The Oklahoma initiative—Insure Oklahoma—allows self-employed individuals and employers with 50 or fewer employees to sign up for the subsidized premiums. Nearly 10,000 people have signed up since the program was enacted in 2004, particularly in the last year when enrollment increased by 234 percent.

Most of those who have signed up previously lacked health insurance. According to the BCBSA survey, 56 percent of all Insure Oklahoma enrollees had previously been uninsured. Nearly four of 10 of the employers offering health insurance through Insure Oklahoma were doing so for the first time, mostly, they reported, because their employees were now able to afford it.

The program has also helped workers who previously could not afford the coverage employers had offered. Since the program's implementation, 36 percent of new enrollees who had previously declined coverage now have it.

Oklahoma Insurance Commissioner Kim Holland said the program was working very well. "I am delighted with the growth we've seen in the past year," she said in an interview. "That's a big jump that we're very excited about."

Oklahoma has one of the highest rates of uninsured in the nation—18.5 percent of its population—but Holland believes Insure Oklahoma could all but eliminate that. "Our limitations are really only funding," she said. "We really look at Insure Oklahoma as the key to addressing our uninsured."

A somewhat similar, though smaller, program has been introduced in Arizona, which also has one of the country's highest uninsured rates, 18.1 percent of the population. Enacted by the state legislature in 2006, 4,745 people have gained coverage so far.

"We're pleased with the numbers," said Chuck Bassett, vice president for government relations and public policy at Blue Cross Blue Shield of Arizona, in an interview. "There's a line to participate," the program having reached its limit in terms of state funding.

"Employers are looking for ways to help them offer affordable coverage for their employees," Bassett said in a press release. "While this program is small by Washington standards, it serves an important role as an example of how creative public-private partnerships can work to solve problems."

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