Dems Push Universal Health Care Plan Without Premiums, Co-Pays, Deductibles

The Democrat-controlled Oregon Legislature will decide this session whether to plunge into the turbulent waters of a universal, taxpayer-funded health insurance system.

Senate Bill 770 – largely a retread of a bill that never made it out of committee in 2017 – has garnered 39 sponsors – all Democrats -- and considerable news coverage, amid the increasingly loud call by liberal Democrats nationwide for a universal, taxpayer-funded health care insurance system sometimes dubbed “Medicare for all.”

Under SB 770, virtually all health care insurance in Oregon – for state and local government employees, Medicare and Medicaid recipients, private sector employees and others -- would be provided by the state under the “Health Care for All Oregon Plan.” Residents would pay no premiums, deductibles, co-pays or other costs. Rather, the system would be funded by existing revenues and as-yet unspecified new taxes.

“The plan must be financed by a system of dedicated, progressive taxes that are based on the payer’s ability to pay,” the bill reads.

The task of fleshing out how the new system would work, and how to transition to it, would be up to a new board, the Health Care for All Oregon Board. Members would be appointed by the governor, and the board would work with the Oregon Health Authority, which would administer the plan, conduct research, negotiate with the federal government over funding and reports on the plan’s effectiveness. SB 770 directs the board to make tax recommendations to the Legislature by fall 2020.

The bill doesn’t spell out exactly what the new system would look like, or when or how the state would roll it out. That would be up to subsequent legislatures and the Oregon Health Authority.

But ultimately, under the new system, insurance companies would cease to provide health insurance in the state. Instead, virtually everyone -- except federal government employees and those who would be “adversely affected” by enrolling in the state plan -- would be insured via the new state system, which would “provide universal access to comprehensive care” that would be paid by the state, according to the bill.

It would require the state to offer job retraining to anyone "displaced by the implementation" of the statewide plan. The bill doesn't specify who that might be, but it could include people at insurance companies that currently handle health-care insurance.

In its basic form, the plan resembles one that Colorado voters trounced in 2016. The “ColoradoCare” plan would have imposed a 10 percent payroll tax, with workers at businesses responsible for a third of the tax, while their employers would have picked up the rest; the self-employed would have paid the full 10 percent. The state would have used the revenue to provide comprehensive health insurance to all residents. Voters defeated the plan 79 percent to 21 percent. Critics said voters balked because the proposed system was expensive, risky and untested.

Among other states, only Vermont has created a universal state-funded health insurance system. But Vermont scrapped it in 2014, citing the tax burden on small businesses. Lawmakers in other states – California, Hawaii, Massachusetts, New York, Pennsylvania – have batted around universal health care legislation. But none has implemented such a system. In Congress, the concept is similarly stalled.

Oregon State Sen. Lee Beyer, D-Springfield, said SB 770 is “an attempt to keep the ball rolling” on improving health care coverage. No one is sure how Oregon would shift from its current system to a state-run universal care system, Beyer said, but it’s important to try because the current system is expensive and complex.

“We’re trying to bring the costs down and to find alternatives,” he said.

But Republicans, in the minority in both Oregon chambers, panned SB 770.

Jonathan Lockwood, a spokesman for three Oregon GOP legislators, said creating a new state bureaucracy to manage health insurance for all would be a “runaway train.” He said he has no confidence the Oregon Health Authority is up to the task.

With Republicans lacking a majority in either chamber, Lockwood said he doubts there will be much debate before Democrats approve the bill. Lockwood is the spokesman for Sens. Dennis Linthicum, Klamath Falls; Kim Thatcher, Keizer; and Rep. Bill Post, Keizer.

Before moving recently to Oregon, Lockwood lived and worked in Colorado and helped lead the opposition to ColoradoCare. The U.S. health-care system “is messed up,” but having the state take over insurance and impose taxes is not the answer, he said.

The current health insurance system in place in Oregon has a mix of insurers: The elderly are covered by federal Medicare; the low-income and disabled are covered by the Oregon Health Plan which is funded by federal and state money and implemented by the Oregon Health Authority and local for-profit and non-profit health insurance agencies; state and local public employees are mostly covered by government-run health insurance plans; private-sector companies that provide health insurance for employees buy plans from insurance companies; and individuals and families who lack insurance from the government or employers buy their own market-rate policies.

A sponsor of SB 770, Sen. James Manning, D-Eugene, said private-sector employees are increasingly feeling the health-insurance squeeze as those employers foist more and more health care costs onto workers.

“The middle-income group is facing astronomical costs for coverage that has astronomical deductibles,” Manning said. SB 770 “is definitely designed to bring relief to them.”

SB 770’s Health Care for All Oregon Plan would fully cover a wide range of services, from primary and preventive care to specialty care, prescriptions, dental services, imaging, inpatient and outpatient care, emergency transportation and even acupuncture.

But even if lawmakers approve it, SB 770 faces big hurdles. Key is obtaining federal permission to create a single statewide system that would include the federal spending for the Oregon Health Plan and Medicare. That would require congressional approval, currently an unlikely prospect.

Also, state and local government employees would need to be moved into the new system. The bill would give them the option of buying supplemental insurance above that provided by the standard Health Care For All Oregon Plan.

Manning said private-sector employers that provide health insurance for their workers should welcome SB 770. The money the firms currently spend paying insurance premiums for employees could go to the state, and the companies would be freed of the hassles of plan management, he said.

“They would not have the burden anymore of” providing medical benefits to workers, he said.

A major unanswered question is whether a state-run universal health plan would save money and provide comprehensive care at a lower cost.

Backers of a so-called single-payer plan say it would cut down on the administrative costs of the current system, where so many different entities, public and private, administer myriad insurance plans. Also, if several western states, including Oregon, implement universal state-run health insurance systems, they would be able jointly to negotiate with drug companies to lower pharmaceutical costs, Manning said.

As part of SB 770, the state would create regional planning boards that would review all major capital expenditure plans by health care providers such as hospitals. The cost threshold for review would be set by the Health Care for All Oregon Board. The bill doesn’t appear to give the board the power to nix projects, but it would allow the board to vote to provide public money for projects.  Democratic lawmakers said other legislation this session is proposing tighter restrictions on spending by health-care providers and tighter controls on health-care cost increases.

The other major question with SB 770 is how much the state would need to raise in new taxes to enable a state-run insurance program to provide comprehensive health care to every state resident without premiums, deductibles or other charges.

The GOP’s Lockwood said the bill raises a host of questions that should be hashed out by lawmakers on both sides of the aisle. “We need more debate on it, but I don’t think you’re going to see that,” he said.

Manning, though, said that under the bill, the Oregon Health Authority would conduct extensive research on how a new system could work, and the public would be in on that discussion. “We need to reduce costs and give quality health care,” he said.

The bill is waiting for a hearing in the Senate Health Care Committee.

You can reach Christian Wihtol at [email protected].

 

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US Rep.  Jayapal has introduced HB6097 that would give all the waivers necessary for a state to create a health care plan.  It includes Medicare, Medicaid, ERISA, and even allow federal employees to be included in the  plan.  The VA and Indian Services could follow a few years later.  Check it out.

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