In April 2004, Senate Bill 1546 authorized the Oklahoma Health Care Authority to develop a program assisting employees of small businesses, 19 to 64 years of age with either (1) a portion of their private health plan premiums (Employer Sponsored Insurance), or (2) the purchase of a state sponsored health plan operated under the state Medicaid program (Individual Plan).

In November 2004, the Oklahoma Health Care Initiative created the funding mechanism to make a program like this possible. SQ 713, passed by a vote of Oklahomans, increased the sales tax on tobacco products. A portion of these revenues were designated to be used to fund the new health program.