For $25 million, the state of Oregon could be poised to expand universal healthcare for residents up to 200 percent of the federal poverty level, saving these residents an average of $1,600 in healthcare costs a year while providing them with more complete coverage than they’d get from private insurance.
The concept, called the Basic Health Plan, would take the subsidies now given to private insurance companies on the exchange and pool them into a state-run health plan for eligible members. In March, the Legislature commissioned a study of the Basic Health Plan from Wakely Consulting Group and the Urban Institute, the findings of which were relayed to the House Health Committee on Monday.
The researchers have laid out four options, which include designing a plan equivalent to the Oregon Health Plan, and one equal to a median plan found on the insurance exchange. Each of those options would either pay providers rates similar to Medicaid or similar to commercial insurance.
Paying commercial insurance rates to providers would come at a greater cost to the state -- $97 million to $119 million a year, while requiring consumers who participate to pay premiums of about $55 a month. Paying at the Medicaid rate would cost the state as little as $1 million to give exchange-level benefits at no cost to consumers. Many advocates of the plan favor giving plan members identical benefits to the Oregon Health Plan, which are richer than those on the exchange and would cost the state $25 million.
If the state adopts the plan, consumers would no longer receive any subsidies for private insurance, although they could still pay full freight for individual insurance.
That $25 million a year ($50 million per budget) is a pittance in relative terms. The state approved $1.1 billion in state dollars for the Oregon Health Plan in 2013, which includes $600 million from the hospital assessment for the current two-year budget cycle. The overall per-member rate to the state to provide insurance for these new people would be about half what it costs on average for the Medicaid program overall, and that’s ignoring the fact that medical costs for the new expansion population currently costs the state nothing.
But the Oregon Law Center’s John Mullin, said that the costs could be even lower, since the state is already covering a number of people, including working-class pregnant women, for whom the state would receive a greater federal contribution under the Basic Health Plan. Mullin has helped spearhead a grassroots coalition of advocates, including the Oregon Center for Public Policy, the Latino Health Coalition and the Asian Pacific American Network of Oregon,
“It can mean savings of about $1,580 for a household with two adults and two children,” Mullin added. “That’s not an insignificant sum for low-income households.”
The concept would be particularly beneficial to Oregon’s Pacific Islander population. The state has more former residents of the South Pacific than about any other state. And because their home islands were heavily used during World War II, the United States has agreed through a treaty to make it easy for islanders to immigrate to America.
But a 1996 federal law bars all immigrants from receiving Medicaid for five years, leaving low-income islanders with very little access to healthcare. This penalty would not apply to the Basic Health Plan, which covers all legally documented immigrants up to 200 percent of the poverty level.
“That is certainly a population that we have a responsibility to,” said Rep. Jim Thompson, R-Dallas, who seemed otherwise skeptical of another healthcare expansion.
The Basic Health Plan has been given a fair hearing by Rep. Mitch Greenlick, D-Portland, who has allocated time for testimony on the concept several times over the past year. The Democrats, with increased majorities in both legislative chambers, are in a position to pass more progressive legislation than they have in years past. A legislative concept will call on the Oregon Health Authority to develop a blueprint for the plan.
The plan could also help Gov. Kitzhaber expand his coordinated care model to as many as 87,000 new Oregonians, since advocates are likely to recommend an option that would hand off the delivery of care for the Basic Health Plan to coordinated care organizations.
But Kitzhaber hasn’t tipped his hand either way yet. There was no mention of the Basic Health Plan in his 2015-2017 budget announced last week, and his office did not return a request for comment by press time.
The Oregon Health Authority has given it a more tepid reception. Earlier this year, a Medicaid advisory group, operating without the benefit of the Wakely/Urban study, recommended against it. On Monday, health analyst Oliver Droppers emphasized the cost to the state and noted potential downsides, such as less insurance company participation in the health insurance marketplace and the removal of insurance plan choice for consumers under the Basic Health Plan.
But Droppers conceded the plan would give consumers better coverage than they have received on Cover Oregon, and taking this population out of the risk pool should have no more than a 1 percent impact on insurance rates and by no means destabilize the individual market. “The consultants said we would not see a death spiral,” Droppers said.
The cause will likely get a boost from the CCOs, who have proven increasingly influential. Mullin said his coalition included CareOregon, which advises Health Share of Oregon and several smaller CCOs across the state.
Jeff Heatherington, the CEO of Portland’s other CCO, FamilyCare, is supportive: “I haven’t seen the details, but conceptually I’m in favor,” he told The Lund Report. “I think we could handle them without a problem.”
Putting the working poor under the blanket of the CCOs, could also strengthen the bottom line of these organizations, since people who are working presumably have better health than citizens living far below the poverty line. “I would think that they’d be a little healthier but that doesn’t mean they wouldn’t have certain issues to work through,” Heatherington added.
Chris can be reached at [email protected].
