Health Exchange Bill Stalls in House
Lawmakers are deadlocked on bargaining issue
May 12, 2011 – A bill to create a health insurance exchange in Oregon appears locked in an impasse on the House side as lawmakers are unable to reach agreement over whether the exchange should negotiate with insurers for lower premiums.
Senate Bill 99 passed the Senate April 24 by a vote of 24-5.
Rep. Mitch Greenlick (D-Portland), who co-chairs the House Health Care Committee, proposed an amendment that would strip the bill of a single sentence that prohibits the exchange from bargaining. Greenlick said he’d like to see the Oregon Health Authority leave that option open when a business plan comes to the legislature next February for final approval.
“This simply opens it up so the Health Authority can produce whatever work plan it needs to produce,” Greenlick said.
But health insurance companies and their numerous lobbyists in Salem want that provision to remain. Some business groups, such as the Association of Oregon Industries, are also against bargaining for the exchange. Consumer advocates, meanwhile, have mounted unified opposition against the bill in its current form.
“One particular group of advocates only wants it without the amendments and another only with them,” Greenlick said Wednesday. “At the moment we’re at an impasse. Maybe we’ll get out of it or maybe we’ll wait for President Obama to give us an exchange.”
If Oregon does not get an exchange going by early next year the state could fail to meet deadlines set by the Affordable Care Act. The federal government would then impose a national health insurance exchange on the state. Many people think that would be a big mistake. But Greenlick, who feels strongly about the proposed amendment, just might be willing to go there if lawmakers fail to reach agreement.
Rep. Julie Parrish (R-Tualitan/West Linn) said she would be satisfied to let the bill die this session and still have the Health Authority produce a business plan with a revised bill for the legislative session in February. But it wasn’t clear whether that was possible. Others on the committee said that hasn’t been discussed.
“There’s not anyone I talk to who likes this thing,” Parrish said. “Some people think it doesn’t go far enough. Others think it’s too broad. I don’t think there’s a rush. There are so many people on disparate sides that have concerns. Maybe it’s not ready for prime time.”
The trouble started on the Senate side when a working group of several lawmakers on the Senate Health Committee met with insurance company lobbyists and consumer advocates. What emerged was a bill that health insurers heralded as a compromise, but consumer advocates opposed.
Along with negotiating power for the exchange, consumer groups would like to see less representation on the board by members of the healthcare industry. As it stands now, the bill allows up to two industry members and at least two consumer advocates.
Groups such as OSPIRG and AARP Oregon want the exchange to help bring down the cost of health insurance by negotiating with insurers. Everyone who wants government subsidies will have to buy insurance through the exchange starting in 2014. The exchange will also pool risk among individuals and small groups in hopes of stabilizing health insurance rate increases.
Rep. Ben Cannon (D-Portland) would like to see the bill go further than it does right now. Earlier this session, lawmakers agreed to accept $48 million in federal funding on information technology as an early adopter of the exchange.
“We’re going to spend $48 million,” Cannon said. “It’s got to be more than a fancy web site.”
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see Senate Bill 86--this will give you the ability to "bargain" with the primary care provider.
For 28 years we have provided complete health coverage for our employees and their families. The premiums for our 9 full-time employees have doubled over the last 9 years to over $100,000/year. It is incredibly important to Oregon small businesses and individual health insurance purchasers to allow the health insurance exchange the ability to negotiate, to selectively contract, for the best price and service when choosing health insurance plans for its members. As SB99 is currently written, the exchange board itself does not have the authority to negotiate directly with health care providers, like SAIF can, for example. The exchange is dependent on insurance companies to bargain for price and other innovations with providers. Except in rare cases, when dealing with large corporations, the health insurance companies have been completely unwilling or unable to challenge providers to make the changes necessary to control health insurance costs. Giving the exchange board the authority to negotiate, to selectively contract for service, will provide the insurance companies the kind of incentive they need to not only more closely examine their own expenses but also to actually move from a “cost-plus” model of health insurance to a “cost control” model. It has been said that SB99 is a compromise bill. From my perspective, small businesses have been doing all the compromising. Small businesses have lost the ability to directly negotiate with health care providers. We have been denied the “single market” exchange which would have created a purchasing group with close to 1 million Oregonians. And SB99 so far forbids the exchange from selective contracting, a key to incentivizing the insurance companies to innovate. That appears to me to be completely one-side compromising. Oregon’s small businesses and their employees need for the Legislature to make the exchange an agent for controlling spirally health insurance costs.