Legislators Pave the Way for School Districts to Join Cover Oregon

House Bill 2128 puts into place the mechanism for school districts to leave OEBB and try their luck on the health insurance exchange, but some Republicans want OEBB’s role eliminated.
The Lund Report

 

June 6, 2013 — School districts now have a choice. Starting in 2015, they can either purchase insurance coverage from the exchange, known as Cover Oregon, or remain in the Oregon Educators Benefit Board. Earlier this week, the Senate gave districts that authority.

This wasn’t the first time the issue surfaced at the Legislature. Actually, lawmakers made that decision earlier and state officials have already signaled to the federal government that they want a waiver to proceed.

This time around, however, the legislation, House Bill 2128, creates a single risk pool of all school employees currently in OEBB.

“The vast majority of teachers get their insurance through OEBB, the Oregon Educators Benefit Board,” Sen. Elizabeth Steiner Hayward, D-Portland, said in her floor speech. “Districts will have the option to opt out of OEBB and into the exchange one by one.”

Maintaining a single pool will prevent OEBB and individual school districts from having too high a concentration of employees with high-cost medical conditions. However, school districts will not be eligible for the federal subsidies offered to low-income individuals and small employers.

“There wasn’t a clear way for how it would work,” said Justin Black, the lobbyist for the Oregon Educators Association, the state’s predominant teacher’s union. Black participated in a work group with Steiner Hayward and representatives from the governor’s office to craft legislation allowing school districts to join the exchange. “If they go on the exchange, [HB 2128] keeps the risk pool together.”

Today, some school districts may have employees with few medical conditions, but down the road, those districts could have an aging, higher-risk group. By keeping the pool intact, it guards against more costly insurance rates down the road, he said. “You have more stability.”

Hanna Lined Up Republicans Against It

Some Republicans, led by Rep. Bruce Hanna, R-Sutherlin, opposed the measure, arguing that creating one giant pool for all school districts of OEBB members would eliminate the competitive advantage for districts that purchase coverage on the exchange.

“There will be no competitive bidding,” Hanna told The Lund Report. “The very provider they’re trying to get away from has approval inside and outside the exchange.”

But, according to Steiner Hayward, school districts might still realize more incentives through the exchange, such as more options for their teachers.

Currently teachers can choose between several plans offered by Moda Health, formerly known as ODS, or plans from the Kaiser Permanente. The exchange, meanwhile, offers far greater choice with multiple plan offerings.

Hanna gave a fiery speech against HB 2128 on the House floor and commanded a party-line vote, forcing the bill to squeak through on a 31-25 vote, the minimum required to receive a constitutional majority. All Republicans voted against it.

Governor Intervenes on Bill Language

Hanna particularly opposed a section of the bill requiring OEBB to agree on the insurance plans offered to school districts in the exchange, saying that would give approval power to the very entity the school districts wanted to get away from.

But that language was struck from the bill on the Senate side, and now the bill says that the exchange must consult with OEBB, along with school administrators, school employees and school boards, about the plan offerings.

“This really cements what we all believe is current policy,” Sean Kolmer, the governor’s healthcare advisor, told the Senate Health Committee. Kolmer and others in the governor’s office worked to craft the revised language.

Black said HB 2128 would not affect school districts like Beaverton that have never participated in OEBB. “Beaverton is out on their own, and they will remain out on their own.”

In the Senate, the bill was opposed by just six Republicans, including Senate Minority Leader Ted Ferrioli, R-John Day. The two Republicans who sit on the Senate Health Committee — Sen. Jeff Kruse of Roseburg and Sen. Tim Knopp of Bend — both supported HB 2128.

Since HB 2128 was significantly amended on the Senate side, it will need to return to the House for a second vote before it can become law.

Ferrioli Says OEBB Bending Cost Curve Up

Senate Bill 789, sponsored by Sen. Mark Hass, D-Beaverton, would limit the number of actuarial analyses that school districts must conduct if they offer insurance outside OEBB. After the first analysis, districts would no longer have to conduct biennial actuarial work after six years and self-insured districts such as Portland Public Schools would be exempt. .

Under current law, districts must prove – every two years -- that they can purchase coverage at a lower rate than what’s offered by OEBB, otherwise they’re forced to enter that pool. Ferrioli believes the law shouldn’t be changed.

“When OEBB was created, it was supposed to bend the cost curve down. The reason we ask that the analyses be done every two years is to prove that OEBB is bending the cost upward,” he said. “We got a two-year snapshot of how badly OEBB is off-track.”

Terri Burton, who works in human resources for Portland Public Schools, said the state’s largest school district has 1,200 employees in OEBB and 3,500 employees who are insured through a trust. The district saved $8 million a year on its non-OEBB employees, while offering richer plans, she told lawmakers.

Image for this story by Sal Falko (CC BY-NC 2.0) via Flickr.

Christopher David Gray can be reached at chris@thelundreport.org.

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