Is Oregon Ready For Universal Health Care?

Are Oregonians so unhappy with their health care coverage that they would want to revolutionize how it is paid for and managed?

That question will be at the forefront as a state-appointed task force explains its proposal for a universal or “single-payer” health care system in a string of virtual presentations starting Saturday and running through June 28 — the final one conducted in Spanish.

The group, created by the Legislature two years ago, has spelled out the details of a system in which all Oregonians would be covered by a single generous health insurance plan that would be funded by new income taxes paid by individuals as well as a new payroll tax paid by employers.

Under the plan, individuals would no longer have deductibles, co-insurance co-pays or other office visit payments. Individuals and private and public employers would no longer pay premiums, and health insurers would be barred from offering plans to compete with the state plan. And the state would negotiate prices that it would pay all health care providers statewide.

The draft plan envisions that the new income tax would cost less overall than Oregonians now pay in combined health care insurance premiums. Oregon employers also would pay less in the new payroll tax then they currently pay in premiums. As proposed, the bulk of the burden of the new income tax would fall on high earners.

Task Force Worked Quietly

Made up of public officials, activists and others, the Oregon Joint Task Force on Universal Health Care has drawn scant attention as the panel and its subcommittees have met scores of times over the past two years, using staff and consultants to sketch out the big picture and intricate details of how a universal health care plan would work.

Now, the task force wants the limelight so it can find out what Oregonians think of the idea and see if it gains traction in the Legislature.

The plan may face particular opposition from segments of the health care insurance industry, some of which would be far more restricted if not put out of business in the state. Some health care providers might balk at the state having so much clout over prices. Nor would the prospect of paying more taxes appeal to some.

That said, the state might end up hiring insurance companies to operate parts of the proposed new system.

Regardless, a universal health care plan would be more efficient than what Oregon has now, and would offer better coverage to most people, and at less cost, said task force chairman Dr. Bruce Goldberg, a faculty member at Oregon Health & Science University and a former director of the Oregon Health Authority.

“My sense in talking to people every day is there are not a lot of people thrilled with our current health care system,” Goldberg told The Lund Report. The system is increasingly expensive, and growing costs are being shifted onto individuals and families, he said.

But Oregonians “need to be convinced and assured that a new system would be better,” he said.

Many developed countries — including Canada and most of Europe — have good-quality taxpayer-funded universal health care systems. The United States has created variations of universal health care with Medicare for the elderly and Medicaid for the poor, which in this state is known as the Oregon Health Plan. The remaining 60% of Oregon’s population may now be unhappy enough that they’ll be interested in such a system for themselves, Goldberg said.

“One of my concerns is we have got a very polarized political environment,” he said. “We’ve seen that polarizing seep into discussions about health care and other things. I hope we rise above the divisive polarized politics and have people take a good look” at the task force’s proposal.

The task force’s seven public presentations amount to an effort to jump-start public input, because so far its efforts have received meager comment. That may be because until a few months ago, the group had not filled in many details of how the new system would work, including how it would be paid for.

“People have been waiting for something to react to,” Goldberg said.

Oregon Would Be First

There’s broad agreement that the current U.S. health care insurance system is wasteful and deficient. But if Oregon moves ahead, it would be the first state to dismantle that system and implement single-payer universal care.

Legislatures in many states — including California, Massachusetts, Iowa and Ohio — have proposed the idea in the past couple of years. But no state has implemented it.

Many European countries have comprehensive good-quality universal health care. So do Canada, Australia, Japan and others. China, Russia and Iran also have universal health care systems, although the quality of care is often patchy or worse.

The materials assembled by Oregon’s task force suggest it would be complex to convert from the current competitive system — in which a multitude of insurers sign up premium-paying members and negotiate prices with health care providers — to a system in which everyone is insured by the government and costs are paid by tax dollars.

Here are the basics of what the task force is proposing:

All people living in Oregon would be covered by a plan that “would be more generous than most current plans,” according to the task force’s summary. “The plan would cover, at the least, services now offered to people on a Medicaid, Medicare, or Affordable Care Act plan.”

People would not pay when getting care and all covered services would be fully paid by the plan.

Details of the plan include that it would cover several hundred thousand Oregonians who now are uninsured; that it would provide dental care, which is not currently included in many insurance plans; and that eliminating co-pays and coinsurance would likely trigger more people to seek more care, Goldberg said.

Employers — private sector or government — would no longer have to buy health insurance plans for their workers.

But people would pay more taxes, with wealthier people paying higher rates.

Low- and middle-income residents would pay little or no new income tax, while high earners would pay fairly steep amounts. Under one scenario proposed, for a household of four, there would be no tax if they earned under $55,000; a 1% tax between $55,000 and about $70,000; a 2% tax between $70,000 and $83,000; and a 3.5% tax between $83,000 and $111,000. Above that, a tax of 9.3% to 15% would be imposed, depending on the variation adopted.

“We anticipate the tax to be progressive,” Goldberg said.

That tax would be cheaper overall that the amount households in aggregate currently pay in premiums, the task force said. In an estimate for the year 2026 — when the new system might launch — households would pay about $10.6 billion a year for the universal health care tax, compared to the $12.25 billion they would pay in premiums under the current system, the task force said.

Private sector and government employers in 2026 would pay a payroll tax of between 7.25% and 11%, depending on the model adopted. They would pay $12.85 billion a year for the new tax, compared to $14.54 billion in premiums, the task force said.

The task force contends that the proposed system would cost Oregon less than the current system, and could use savings to pay for improved benefits, including more behavioral health care.

All told, in 2026 the new system would have annual revenues of $57 billion, compared to $58 billion if the current system were maintained, the task force said.

Federal Approval Crucial

The state would need federal approval to include federally funded programs — Medicare, the federal health insurance marketplace used by Oregon and the Medicaid-funded Oregon Health Plan — in the system. That would allow the new plan to receive funding that now goes to those programs.

The draft still needs work and additional details, Goldberg said. For example, “there are almost an infinite number of ways you can devise different tax brackets,” he said.

It would be up to the Legislature to decide if it wants to move forward, including with more research, Goldberg said.

“It’s going to require legislative leadership,” he said. “I think there are a number of legislators who have been very interested and who will be champions for it.”

In the meantime, supporters of the proposal are planning to discuss it with potential critics. In addition to holding the public presentations, the group will meet with industry groups this summer, Goldberg said.

The proposal would deprive health insurance companies of most of their work in Oregon. They would be allowed to offer policies for care not covered by the universal plan, but they would not be allowed to compete with the universal plan.

More than a dozen insurance companies, operating as regional coordinated care organizations, currently manage care for the 1.4 million members of the Oregon Health Plan, Meanwhile, about a dozen insurance companies provide coverage for the roughly 1.4 million people who have commercial health care insurance through their private or government employer or bought on the health care marketplace system.

“I don’t think insurers are going to be particularly happy, and probably that’s an understatement,” Goldberg said. On the other hand, the state may want to contract with insurance companies to run elements of a statewide universal health care plan, he noted.

Among hospital systems and other providers, the views on universal health care “are all across the board,” Goldberg said. “A lot relish a simpler system, not spending time administering insurance claims,” he said. “But other providers are concerned about the state setting payment rates.”

The key to an efficient universal health care system, Goldberg said, is having it be big, to streamline administration. To that end, Oregon would want federal approval to wrap Medicaid, Medicare and the health insurance marketplace into the universal plan, Goldberg said. Between them, the three systems insure about 2 million Oregonians. Having the state cover those people through the plan and receive the accompanying federal funding is important, he said.

“A lot of the plan really does hinge on those federal approvals,” he said. Those approvals could be made by federal agencies and would not need Congressional action, he said.

The task force is slated to submit its plan to the Legislature in September.

If the plan is solidified and lawmakers ultimately opt to move forward, the concept would likely end up before voters.

Oregon residents likely have become more receptive to the idea of universal care as costs have gone up and individual consumers are increasingly being forced to pay more of them, Goldberg said. “I think that’s a big issue.” 

You can reach Christian Wihtol at [email protected].