Oregon got another nod of approval in its attempt to renew and double down on transformations to its Medicaid system, with acting Centers for Medicare & Medicaid Systems Director Andy Slavitt praising the reforms Thursday on a special trip to Portland.
“Seeing the coordinated care model firsthand, it’s hard not to be impressed,” Slavitt told reporters at Project Access Now in southwest Portland. He added that his trip to the city was meant to be a clear signal that his agency was ready to work with the Oregon Health Authority and hammer out a five-year extension of the coordinated care model, with a new focus on giving CCOs more dedicated funding to target the social determinants of health.
“It’s an extremely high priority,” he said.
The state has asked for a 3.4 percent annual increase in spending each year as well as an additional $1.25 billion for the new investments. Additionally, the state wants to continue to draw $150 million a year from the hospital assessment fund to help the state’s health systems continue their transformation away from a focus on emergency rooms and hospitalization.
Waiver Money May Bridge Budget Deficit
The agency has reported a $1.2 billion deficit and Gov. Kate Brown and her Republican opponent, Bud Pierce, have differed on how to pay for that. Brown supports Measure 97, which would raise $6 billion from corporate taxes, while Pierce is relying on the federal government to come through with $2 billion over five years to backfill the existing program rather than earmark it for new investments.
The $1.25 billion was pitched as a necessary federal investment to allow CCOs to make new upstream innovations that will bring about better health and lower costs in the long term. An Oregon Health Authority spokeswoman conceded that some of that money may end up covering the state's share for the existing program and reforms.
“The money that the state is requesting of the federal government through the Medicaid waiver would go toward a variety of needs, including both existing programs and new programs to target social determinants of health,” spokeswoman Courtney Warner Crowell told The Lund Report. “A portion of the funding could go toward offsetting the general fund need but the funding amounts are unknown at this time and depend on CMS approval.”
Oregon’s Marketplace Showed Most Growth from 2015
Slavitt was also on hand to boost support for Oregon’s health insurance marketplace. The state marketplace, housed in the Department of Consumer & Business Services, uses healthcare.gov and has recovered mightily from the debacle of Cover Oregon.
Brown, who joined Slavitt at the press conference, said that the marketplace had a 31 percent increase this year over 2015. “That’s absolutely incredible. It was a bigger increase than any other state.”
Most of those consumers switched over from off-marketplace plans so they could count on a functioning website for enrollment. Slavitt said that Oregon still had some low-hanging fruit -- an estimated 26,000 people bought individual health plans outside the exchange last year, despite qualifying for discounted coverage if they had bought similar plans through the healthcare.gov website.
The marketplace, with nonprofit agencies such as Project Access Now, is also working to help people make wiser choices. Below 250 percent of poverty, consumers can get subsidies not just for premiums but for coinsurance if they opt for a silver plan rather than a bronze plan. Director Pat Allen implied his agency would give that advice. “Getting the cheapest plan is not always the best plan,” he said.
System Tottering on Low Subsidies, Low Penalties
Together, the Medicaid expansion, the marketplace and guaranteed issue outside the marketplace have helped reduce the number of uninsured in Oregon to about 5 percent, according to estimates from Oregon Health & Science University.
The marketplace plans to microtarget the remaining uninsured -- primarily Hispanics and young adults -- to get more people to join the system
“Using video and digital media, and focusing on events where millennials participate, our campaign will engage young people about the benefits of insurance,” said Aaron Corvin, spokesman for the marketplace.
But they have a hard sell. The individual market has been teetering because it has attracted a high proportion of people who use a lot of healthcare services, while younger, healthier people have looked at the deal offered by the ACA and balked on signing up.
The modest subsidies offered by the exchange have not been enough to make it seem affordable to people who don’t use much healthcare, and the tax penalty for avoiding the high-cost plans is also too low.
Corvin countered that putting down the money upfront helps ward off the potential for even higher costs in case of a catastrophe. “Going uninsured invites the risk of piling up debt. Purchasing insurance provides a means to protect your assets over the long term. Another part is that you are buying something tangible, something useful. You don’t get anything from paying a penalty.”
People below 250 percent of poverty get help with both premiums and out-of-pocket costs, but they are often bogged down by student loans and escalating housing prices, leaving little discretionary income or the ability to pay even a small percentage of their income on health insurance.
Above that threshold, young adults get only a token subsidy for premiums. And people above 400 percent of poverty get no help at all offsetting the costs of plans that are spiralling out of control at more than 20 percent a year.
A single 33-year-old making $40,000 would get a subsidy that amounts to just $30 a month. The cheapest option would be to pay at least $212 a month -- about $2,500 a year -- for a catastrophic bronze plan from Providence Health & Services that doesn’t pay for anything outside of preventive services before a $6,000 deductible.
A sample silver plan, from the Regence subsidiary Bridgespan, would run $325 a month with the subsidy, or $4,000 a year -- 10 percent of income -- and still have a $4,000 deductible, although it would give the consumer access to doctor’s visits with just a $30 copayment.
It’s unclear what Oregon could do to fix this predicament. For Congress to make the exchanges work, the law will likely have to be altered to increase the subsidies or the penalty -- or both. That may require the Democrats winning back the House next month, as Republicans have shown interest in only one change -- repeal.
Chris can be reached at [email protected].
