Cover Oregon Plots Future with Mind Toward Avoiding Risky Goals

Tina Edlund explained that a hybrid process will continue for Medicaid enrollments so that the state can be better assured of not promising more than it can deliver. Meanwhile, insurance agents, who account for 50% of all sign-ups, continue to struggle to get paid.

Cover Oregon is still having problems getting insurance agents the money they’ve earned, and the exchange has yet to collect a dime from the insurance companies that owe it an assessment on every policy sold.

“I’ve been very patient,” said Richard Anderson, an insurance agent at Modern Insurance in Wilsonville. “I think I’ve got maybe 12 percent of the commissions I am due.”

The exchange’s acting operating officer, Mark Schmidt, conceded this had become a chief focus of Cover Oregon and 20 full-time staff members along with some temporary workers were now working to fix this problem and get the participating health insurers to send brokers their proper commissions. Much of the chaos is a result of data-entry problems that came with the crippled technology.

Cover Oregon hasn’t even tried to collect the money that health insurers owe it in the form of a policy assessment tax. Officials said this was a lower priority than making sure consumers got covered and that insurance agents, who are responsible for 50 percent of the sign-ups, got their commission. But they plan to ask insurers to pay for their backlog of monthly assessments in August.

Patnode Takes Over

The meeting was the first presided over by new Cover Oregon director Aaron Patnode, who came to the exchange from Kaiser Permanente. Clyde Hamstreet, the acting director, will leave his role putting out the fires at Cover Oregon on Wednesday. 

Under Hamstreet’s guidance, Cover Oregon has moved to scrap its state-run online exchange for the federal portal and move the Medicaid program to the Oregon Health Authority. Hamstreet also focused on cutting costs, which were down to about $9.4 million in June after spending $142 million last year.

The exchange is no longer paying Oracle for its questionable consultation and Cover Oregon has peeled off staff, mostly through voluntary departures, rather than layoffs, according to acting financial officer Sue King.

Cover Oregon has $28 million left in the bank to get through the next six months on its federal grants, though when the exchange sends out its bills to health insurers, Patnode said they should receive $6 million to $7 million.

The number of policies sold on the exchange continue to climb, now hitting 95,000. The state’s combined efforts has also expanded the Medicaid population by 365,000. Open enrollment for private insurance has closed, but consumers can still sign up if they’ve had a change-of-life experience such as a move, new income level or addition to the family. Eligible people can sign up for the Oregon Health Plan at any time.

Kitzhaber: Cover Oregon a Means to an End

Tuesday’s monthly meeting kicked off a two-day marathon session in the Portland suburbs where Cover Oregon planned to brainstorm its future. For now, the exchange will continue to collect fees on insurance and operate on a lower level while handling over the actual enrollment for 2015 health plans to the federal government.

In a letter to the Cover Oregon board, Gov. Kitzhaber wrote that he would keep a close eye on their work as they wrestle to dramatically alter their workload and function, while retaining a similar mission:

“It is clear that Oregon’s state exchange was envisioned to be a means to an end, not the end in and of itself. Your work -- our work -- is to ensure that Oregonians have access to quality, affordable healthcare. As I have said before, form should follow function.”

Kitzhaber wrote that transferring the responsibility for commercial insurance enrollment to the federal exchange while moving Medicaid enrollment back to the Oregon Health Authority had become the least risky alternative to reaching the same end after Cover Oregon’s technology failure.

He also made it clear that he wanted the insurance exchange to learn from the past year and limit its risk and scope, which may put a damper on talk that Cover Oregon resurrect its state-based exchange for the 2016 insurance plan year.

Failing to limit scope was probably the biggest mistake of the well-intentioned former Cover Oregon director Rocky King, who continued to boast in the weeks before the failed launch that Oregon had maintained its course to have the most comprehensive online insurance marketplace, even as other states, like neighboring Washington, scaled back their ambitions.

Ten months later, Oregon has hired Deloitte, the firm responsible for Washington’s successful exchange, and the state has decided to pull the plug on its own overambitious online portal for 2015.

Medicaid Clients to Be Informed by Mail

Tina Edlund, the state official charged with transferring technology to the health authority for use in enrolling people in the Oregon Health Plan was careful to note that her expectations for a smooth November come from looking only at what Deloitte could reasonably accomplish in the next few weeks so that testing could begin on Aug. 15.

“It’s a very narrow focus because I wanted to drive to a very narrow focus,” Edlund said. 

Medicaid clients still won’t get immediate approval for the Oregon Health Plan when the authority takes back enrollment from Cover Oregon on Nov. 15.  A hybrid process will continue. Clients will be able to sign up online, but they’ll have to wait for a notice in the U.S. Post to learn if they’ve been approved or rejected. If they are ineligible for Medicaid, their financial information will be automatically forwarded to the federal exchange, which will determine what subsidy they might receive for private insurance.

Everyone will have to re-enroll. The federal government will not accept Cover Oregon’s records for financial eligibility and Medicaid must be redetermined annually.

Edlund said in her presentation that Deloitte’s analysis of the Oracle technology showed that it was only about half way to being functional, but she explained in a question from The Lund Report that their work will continue without any expectation that all or most of it will be finished for this first phase. But eventually, the federal government will require Oregon to offer immediate online notification of Medicaid eligibility, without making people wait.

“We scoped it to something that could be done by August 15,” Edlund said. The late summer deadline is a full three months before the switch, giving the state a long window to make sure it goes as planned this time.

“If something happens, [I want an] immediate head’s up,” Dr. George Brown, a Cover Oregon board member and the CEO of Legacy Health, told Edlund.

Chris can be reached at [email protected].

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