Board edges towards goal of a universal health plan for Oregon

A state board tasked with reimagining Oregon’s health insurance system is closing in on its goal of crafting a universal health plan to cover everyone.

The board is designing a comprehensive health plan to provide all residents with the same coverage and benefits, something that most other industrialized countries have along with many other countries, like Costa Rica, Cuba and Botswana. But in the U.S., with its fractured health insurance system, the poorest have federally and state-paid free care while some have no care at all.

The Universal Health Plan Governance Board, approved by lawmakers in 2023, is mandated to upend that system by offering something better. It was established, according to Dr. Helen Bellanca, the board’s chair, because the current system is failing.

“We’re creating a strong equitable plan so that everyone in Oregon can get the high quality, equitable care they deserve,” Bellanca told lawmakers in a presentation on Tuesday. “The new system will be simpler, more affordable and more sustainable.”

 The plan comes at a time when the existing health care system is facing so many challenges that state lawmakers have indicated new openness to the idea. It also would fulfill the intent of Ballot Measure 111, which was approved by voters in 2022, putting the right to affordable health care in the Oregon Constitution.

Bellanca said the nine-member board, with the help of outside consultants, has agreed on many key aspects of the plan. The same benefits would be offered to everyone, but residents could buy supplemental policies for care not covered by the plan. The plan would focus on primary care, with 15% of spending dedicated to that.

“There will be no such thing as out-of-network care,” Bellanca said.

The plan would be run by an independent, nonprofit public corporation and be paid for through a progressive tax structure. 

“Our goal is to minimize cost-sharing at the point of care,” Bellanca noted.

The outlines of the plan are laid out in a draft report that the board is scheduled to give to lawmakers Dec. 1. It lays out steps toward a universal health plan that include offering public option plans to individuals not covered by their employer and establishing uniform rates for providers. The draft lacks details and fails to address the trickiest issue of all: financing.

The board has until next September to present its final plan to the Legislature, but critics question whether that will mark a milestone or a setback in a longtime goal of universal coverage that’s long eluded Oregon leaders and those in several other states.

Draft report

A draft of the board’s report, which will be discussed Thursday, states that residents who permanently live in Oregon and spend more than 200 days in the state will qualify for coverage. The board proposes including immigrants regardless of their residency status as well as people who are unhoused. Minors would automatically qualify for coverage and those in prison or jail would be covered. Out-of-state students living in Oregon at least 200 days a year would also be covered by the plan.

Residents would be able to see any provider they choose.

The plan would include provisions for coverage outside the state, especially for people who work in other states. The plan would contract with a national network or put aside funds to ensure this coverage. Oregonians might have to pay part of the cost of out-of-state care, however.

The plan would include behavioral health benefits intended to resemble those offered under the Oregon Health Plan, the state’s health insurance coverage for low-income people. The draft report calls for “expanded behavioral health benefits” but does not specify what that would include and says this recommendation may be revisited before the plan is finalized.

The Universal Health Plan Governance Board approved a recommendation that at least 15% of total expenditures be spent on primary care, up from the 12% currently in state law. Numerous studies have shown that increased primary care spending saves money by stemming medical problems before costs soar. In fact, a 2023 study by Portland State University and Oregon Health & Science University researchers found that every dollar of increased primary care spending saves nearly $12, including on emergency and in-patient care.

“UHPGB members felt strongly that setting aside a target amount for primary care of 15% would ensure that providers prioritize routine well-care and reduce utilization of more costly services,” the draft states.

The report calls for primary care providers to be reimbursed based on value-based care, which considers health outcomes and the quality of care. In fee-for-service models, payments are based on costs and the amount of care, not the impact.

For more than a decade health care thought leaders have espoused value-based payment models, but some, like Republican Rep. Ed Diehl of Stayton, vice chair of the state House Health Care Committee, doubt whether they necessarily save money. 

“I'm frankly not convinced that it's providing value,” Diehl told The Lund Report. 

Lack of financing details

Proponents have pushed creating a universal health plan in Oregon for about 25 years, dating to a 2002 ballot initiative which would have created progressive income and payroll taxes to pay for health services. That effort failed — as have similar efforts in other states — but the work has continued, with a Joint Task Force on Universal Health Care in 2022 recommending a single payer system, which involves a public entity like the government paying all costs. 

The task force found that Oregon would need about $22 billion in new personal and business tax revenue in 2026 to establish a single payer system. To replace consumer payments made with health insurance premiums and copays, the task force recommended a progressive tax structure, with people who make more money paying more.

The governance board’s draft also recommends progressive taxes, but it does not specify how much money would be needed. Retired physician, Sam Metz, a member of the 2022 task force and a longtime proponent of a universal health plan, said the board’s finance committee is considering an amount less than what the task force recommended, which he said would be inadequate. He said the board received little guidance on how to pursue its mission, something that Gov. Tina Kotek also noted when signing the law that established the board. Metz said that, as a result, the board’s efforts are essentially a waste of time and money, duplicating some of the task force’s work but failing to commit to a single payer system, which he says is the only way to ensure comprehensive care for all.

“Single payer is the only option that will produce better care for more people for less money,” Metz said. “Every other option compromises one of those.” 

The draft states that the plan should be administered by a public corporation, which would mean it would be subject to Oregon’s public ethics, meetings and records laws. A public corporation would provide flexibility in organizing its financial structure and abiding by state contracting, procurement, personnel and bonding laws, the report says. 

It recommends that the plan be operated through a trust fund that would be separate from the general fund that’s used for discretionary legislative spending. The fund would be a “hybrid” model, with a mix of private banking and Treasury management. 

It’s unclear how much would be needed in the trust fund or whether the plan would actually save the state money.

“In all of their principles, the governance board has not stated the goal of reducing overall health care costs,” Metz told The Lund Report.

The report does suggest that increased investment in primary care, global budgets for hospitals and bulk pharmacy purchases would save money.

“Revenue to fund the plan is already in the system,” according to Bellanca’s presentation to the legislative committee, “we simply need to redistribute current health care payments, reducing the overall amount individuals and business pay for health care.” 

But critics and advocates want more details. The lack of them in the report worries Warren George, who was vice chair of the board in 2024 before stepping down, is a longtime business advocate of a single payer system and also served on the 2022 task force. 

“If I see anything to be concerned about, it is that a lot of the report has to do with the benefit side,” Warren told The Lund Report. “Everyone’s for that but how do we get people aligned on finances, especially since we’ve become such a fractionalized society?”

The economy also is not flush, with consumers facing rising prices, particularly for their health care. An Oregon economic forecast released Wednesday had somewhat good news, however. It said the state faces a $63 million deficit over the next two years compared to the nearly $330 million previously forecast.

Other hurdles

Bellanca, the board’s chair, gave lawmakers few financial details in the hearing on Tuesday, saying that the board is working on the numbers.

“We are deep into the development of a revenue strategy which will have to be reconciled with our planned design and expenditures committee,” she said.

She said one of the biggest problems in developing a universal plan is the “fragmentation” of the health care system, with dozens of insurers. A universal system would eliminate the need for insurers — which would save on administrative costs, proponents note — and it could put managed care plans like Kaiser Permanente out of business, she said.

“This plan will affect every individual and every business in Oregon, Bellanca said.

It would also eliminate the need for state health insurance plans currently administered by the Public Employees’ Benefit Board, PEBB, and the Oregon Educators Benefit Board, OEBB. 

The plan would upend federally backed health care as well. The federal government pays the biggest share of costs for the Oregon Health Plan, the state’s version of Medicaid. State officials would need to obtain waivers from the Centers for Medicare and Medicaid Services to direct federal funds to a universal plan. And it would need a waiver for Medicare, the federal health care system for seniors and those with disabilities.

And the plan would bump up against a federal law on business health plans. The 1974 Employee Retirement Income Security Act, ERISA, sets standards for health and retirement benefits offered by companies. 

“It’s been assumed that if you have a state-based single payer system that would be overstepping and impinging on the rights of businesses to control those costs on their own,” Bellanca said. “It is something that we would have to address.”

George noted that despite the problems, Oregon health care leaders need to do something with costs in the U.S. soaring past what other countries spend.

“We've got to realize how much trouble we're really in here,” George said. “We're twice that of other countries. Do we want to try for three times?”

The board meets Thursday morning to discuss financing and other issues and will meet again in December. It will continue meeting until turning it its final report in September.