A 2011 decision by Oklahoma’s insurance commissioner to return a federal health care grant came just days after a prominent conservative encouraged state officials to reconsider their approach to President Barack Obama’s health care overhaul.
Insurance Commissioner John Doak announced he would return $1 million in federal funds barely a week after Barry Goldwater Jr., board member at the Goldwater Institute, proposed in an email that the state return all money associated with the new law. The money was intended to pay for health insurance premium rate reviews as required under the Affordable Care Act.
Emails – which show how Doak and Gov. Mary Fallin progressed from supporters of a state-based exchange to critics – were made available on Feb. 7 in response to an open records request filed by The Oklahoman in November with the insurance commission, the governor’s office and the attorney general’s office.
The email from Goldwater – addressed to Katie Altshuler, a senior policy adviser to Fallin – criticized Oklahoma state officials for moving ahead with plans to comply with the new health care law while simultaneously suing the federal government to strike down the mandate.
“I am hard pressed on how to fight this battle,” Goldwater wrote in an email to Altshuler on April 4, 2011. “What would happen if the Governor just gave the money back?”
On April 11, 2011, Doak, a Republican, told his staffers to prepare a news release announcing he would return the grant, which was accepted by his Democratic predecessor.
An attachment in an email two days later indicates Fallin had also decided by then that she would return $54 million in federal funding that would have helped develop a health care exchange, a primary component of the health overhaul.
Doak and Fallin made their decisions public shortly thereafter.
Health insurance exchanges are one of the most debated elements of the Affordable Care Act. Exchanges are organizations set up to create an organized and competitive market for buying health insurance, according to the Henry J. Kaiser Family Foundation, a health policy analysis group.
Beginning in 2014, exchanges will serve primarily individuals buying insurance on their own and small businesses with up to 100 employees, though states can choose to include larger employers in the future, according to the foundation.
States that decline to develop a health care exchange will be rolled into a federal exchange instead, according to the law.
Emails demonstrate that just a few weeks before, both Doak and Fallin were intent on using the funds to develop an Oklahoma-based, pro-growth health care exchange.
In a written statement, Doak said his decision against participating in the new federal health care law was not influenced by conservative organizations.
Doak, who took office in January 2011, said he was opposed to Obama’s plan since its inception but that he instructed his staff to gather information anyway about creating a “private market solution” without influence by the federal government.
“As we became more familiar with Obamacare, we realized that wouldn’t be possible,” he wrote.
The Insurance Department’s spokeswoman, Kelly Collins, said in a separate written statement that the reversal was the natural progression after Doak began studying the federal program.
“After taking office, Commissioner Doak interacted with many conservative think tanks and ultimately made the decision that an Oklahoma exchange without federal strings could not be accomplished,” she wrote.
A records request identical to the one filed with the insurance department was sent to Fallin’s office and that of state Attorney General Scott Pruitt.
Pruitt’s office has responded in part, but Fallin’s office has yet to respond.
The insurance department emails, nevertheless, demonstrate Fallin was supportive of a health care exchange just a matter of weeks before sending back the $54 million.
“Unlike the federal exchange Washington may try to force on us, the exchange we are trying to build offers a positive, free-market alternative to the big government, tax-and-spend plan that is the (Affordable Care Act),” Fallin wrote on March 22.
In addition to the Goldwater email and several emails from other local and national conservative groups, Doak also received emails from insurance providers who complained an exchange could impact their bottom line.
An email dated March 1 from Tim Hendricks, owner of Tulsa-based insurance company Business Planning Group, to Doak and others said insurance agents and brokers could not maintain a level playing field if an exchange were to be developed.
“Buying direct via an Exchange will cost the consumer less than through an agent or broker,” Hendricks wrote. “Unless Comm. Doak and our friends in the State Legislature can design a state Exchange that requires accessing broker services before an applicant can purchase health insurance, our profession is doomed.”
Another vocal critic of the state plan came from within the insurance department.
Former state Sen. Randy Brogdon, a deputy commissioner under Doak, publicly protested a state-based exchange but not in his capacity at the department.
Rather, Brogdon was listed as the lead author of an email in March sent out by the Tulsa County Republican Platform Committee that called on Fallin to return the $54 million in federal funds.
Brogdon was the only senior adviser in the insurance department who was opposed to building a state-based exchange, according to emails.
“On the surface a state exchange sounds like a better choice, but ultimately I believe a state exchange will usher in full fledge Obamacare to Oklahoma,” he wrote in a policy paper prepared by the department.
Brogdon could not be reached for comment.
The emails demonstrate top Doak advisers were concerned that his acceptance of federal dollars might put him in a bind. In dozens of emails they encouraged him to walk a fine line between opposing Obama’s plan and pushing for a state-based exchange.
“There could be serious political repercussions for being involved in the implementation of the exchange,” wrote Rick Farmer, another deputy commissioner, in a policy paper shared via email. “A large part of your political success was the overwhelming opposition of Oklahomans to this overreaching, federal incursion. Implementing Obamacare will taint you.”
In another email, Farmer asked the Heritage Foundation, another conservative think tank, to write opinion pieces for newspapers in Tulsa and Oklahoma City that would explain why the grants and exchanges are OK, saying, “we are getting beat up pretty hard here in Oklahoma.”
Rep. Mike Ritze said that he would attribute the sudden change of plans more to pressure by “boots on the ground” Oklahoma residents and lawmakers who did not want Fallin to pursue an exchange.
Ritze said several large rallies at the Capitol encouraged many top policymakers to reconsider the effort.
“The biggest concern would be the exchanges leading to a kind of backdoor approach to Obamacare,” he said.