Cover Oregon Director Explains October Launch to Legislators

Rocky King contends that for many young people, insurance premiums may come in at very low or no-cost monthly premiums, but getting them to sign up remains a critical challenge that will make or break the exchange.

 

Sept. 18, 2013 — With less than two weeks to go before Cover Oregon hits the streets, Rocky King, its executive director, told state lawmakers earlier this week that his site will be ready to go in a staged rollout, even as he expects technical glitches to be inevitable during the first few days.

Cover Oregon goes live Oct. 1 for insurance agents and community partners. Individual consumers can sign up without assistance starting Oct. 15.

“We’re going to utilize our partners so that people will have the best experience possible,” King said, noting the system would definitely crash if everyone tried to sign up on the first day. People have until Dec. 15 to enroll in order to begin receiving coverage on Jan. 1. Enrollment, however, will continue through March 2014 for the exchange’s first year.

The biggest question overhanging the insurance exchange is the Catch-22 from the “Field of Dreams” — if you build it, will they come? “If people don’t show up, we’ll have to pack up and go home,” King said. “There’s no money to run it if people don’t sign up.”

Oregon has 560,000 people without health insurance, and 400,000 will be eligible for financial assistance through insurance subsidies or can qualify for the Oregon Health Plan if they earn up to 138 percent of the federal poverty level..

“The subsidies will really help college students,” King said. “Their plans will either be zero or very low.”

But for the system to work, young adults, who seldom purchase health insurance, will have to be persuaded otherwise. If they remain uninsured, they’ll face a 1 percent tax penalty next year, a rate that increases in subsequent years.

King doesn’t expect the tax penalty to be a significant factor: “People are going to buy or not regardless of that.”

Cover Oregon projects about 220,000 people will sign up during the first year, with another 60,000 during each of the following two years -- as awareness of the exchange becomes more widespread.

Speaking before a joint meeting of the House and Senate Health Care Committees, King said Cover Oregon is launching the most ambitious online exchange in the country, and expects to have all the options foreseen by the Affordable Care Act.

Besides the individual online exchange, Cover Oregon is the only state offering a wide menu of private insurance options for small businesses, allowing them to choose multiple plans from multiple providers. Washington intends to only offer limited options to small businesses while the federal government has delayed offering small employers a menu of options in their exchanges. Small employers on the federally run exchanges will get have one choice.

Meanwhile, Republicans are determined to see President Obama’s signature healthcare law fail, with 35 states refusing to set up their own exchanges, forcing the federal government to strain its resources to help those states. The Obama administration gave up offering multiple plans in its small employer option program for 2014, but online exchanges for individuals are expected to be operating nationwide as planned.

Additionally, in California, King said Medicaid enrollment has been left to individual counties, while in Oregon, low income individuals can sign up for the Oregon Health Plan or Healthy Kids through Cover Oregon.

Although 102 different insurance options are being offered by Cover Oregon, few are statewide. Every county has at least two insurance companies offering plans, while residents of Clackamas County are the only Oregon consumers who can choose from the majority of insurers.

Eleven insurers are offering individual plans somewhere in the state, including two run by coordinated care organizations and two organized by health co-operatives. The small group exchange for companies with 50 or fewer employees hosts eight insurance companies. If small employers have fewer than 25 employees and average salaries below $50,000, they can qualify for subsidies.

Cover Oregon is also offering stand-alone dental care plans from 10 insurers.

Doubts of Affordability

Despite the promise of subsidies for low income people who do not qualify for the Oregon Health Plan, advocates such as John Mullin of the Oregon Law Center and Janet Bauer of the Oregon Center for Public Policy continue to push lawmakers to consider a Basic Health Plan for people with incomes below 200 percent of the federal poverty level.

As conceived by the Affordable Care Act, a Basic Health Plan would be run by the state using the federal subsidies that would otherwise go to private insurers who cover this population. Those eligible would have the choice of signing up or buying unsubsidized insurance. Those covered by the Basic Health Plan might pay only a token amount to receive coverage.

Speaking to legislators, Bauer said that without the Basic Health Plan, a 40-year-old single person making $18,000 might have to pay $68 a month on Cover Oregon for a mid-priced silver plan, even with subsidies.

“I think this is a population that is not going to participate,” lamented Sen. Laurie Monnes Anderson, D-Gresham, agreeing with Bauer and Mullin.

But Bauer’s conclusion was based on preliminary Congressional Budget Office estimates for silver plans, and individual insurance rates for Oregon have come in much lower than expected. Consumers at that income level may not have to pay anything for monthly premiums if they choose a higher-deductible bronze plan.

The benefits of a bronze or a silver plan are the same, but they are assigned a color based on the share spent on upfront premium costs versus copayments and deductibles.

The bronze plan has the lowest-cost premium, but the highest cost-sharing at the time of use. A gold plan has higher premium costs, but a smaller deductible and smaller copayments. A silver plan falls in between.

A younger, healthier person would most likely purchase a bronze plan while an older person who used more medical services might consider a silver or a gold plan. Consumers who choose silver or gold plans can receive additional help to reduce out-of-pocket cost-sharing, making these richer plans more affordable to heavy users of the healthcare system. Additional assistance is not available with bronze plans.

Subsidy allotments are based on the affordability of a silver plan, but consumers won’t lose their subsidy if they choose a lower-cost bronze plan, creating the potential for zero-cost premiums.

Adults 18 to 29 can also purchase a catastrophic plan, which pays for preventive healthcare with the premium but otherwise only kicks in when the policy holder has spent $6,350 out of pocket. Subsidies are not available for these plans.

And there is one group of lawful Oregon residents who won’t benefit at all from any subsidies — immigrants who’ve been in the United States less than five years.

Alberto Moreno, the chairman of the Commission on Hispanic Affairs, said this population has all the necessary paperwork to be considered legal permanent residents. They work, pay taxes and make meaningful contributions to society, but they are categorically barred from participating in the Affordable Care Act and roughly 7,000 people will remain without insurance. Under a Basic Health Plan, these people would become eligible for coverage, Moreno noted.

Christopher David Gray can be reached at [email protected].

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