There’s excitement by Governor Kate Brown and other officials after the federal government approved Oregon’s Medicaid waiver for another five years. But that doesn’t mean Oregon’s home free.
No new money is on its way even though the state asked for $1.25 billion over the next five years to fund community collaboratives such as stable housing and transportation, better known as the social determinants of health.
The state Medicaid budget also projects a $1 billion shortfall next biennium, however that gap could be filled with taxes on hospitals and health insurers along with belt tightening by the coordinated care organizations.
Jeremy Vandehey, the governor’s health policy aide, assured reporters that the waiver guarantees Oregon’s Medicaid population can continue receiving healthcare benefits despite calls by President-elect Trump to repeal the Affordable Care Act. With the Medicaid expansion, close to 400,000 Oregonians are now on the Oregon Health Plan, while 1.1 million Oregonians receive coverage through the state’s 16 coordinated care organizations.
“This is a five-year agreement between the state and the federal government on how to run the Oregon Health Plan,” Vandehey said. “The waiver doesn’t talk about match rates or how we receive money from the feds. We still face a budget challenge but the waiver continues the model we developed over the last decades, an integrated coordinated system.”
Currently, the federal government covers approximately 78 percent of the cost of the Medicaid program for 2015-17 (a total budget $14.6 billion) and will cover approximately 75 percent in 2017-19. In the 2017-19 budget, the state will face a state Medicaid shortfall due to federal match rates decreasing, other fund revenue decreases, and ending of one-time revenue.
Oregon's Medicaid waiver and coordinated care organizations have reduced that rate of growth of the program from 5.4 percent to 3.4 percent per capita over the last five years, and the waiver that was just approved commits to continuing to hold down costs to not more than a 3.4 percent rate of growth. If costs had continued to grow at 5.4 percent since 2012, the budget challenge in the next biennium would be approximately $600 million higher.
The additional $1.25 billion over five years that the state requested in its initial waiver application would have been to fund a new pilot program, and would have been in addition to the federal funding the state expects to receive over the next biennium. The governor did not include additional waiver funding in her budget.
In 2012, the state received $1.9 billion in federal investment in return for holding down cost increases to 2 percentage points less than typical medical inflation.
Securing the federal waiver was a priority for Governor Brown. She and her administration began working with the Centers for Medicare & Medicaid Services last year on Oregon's waiver renewal application, which was set to expire in June 2017.
“Today is an exciting day for the 1 million Oregonians who will continue to receive the quality care they have come to know and rely on,” Governor Brown said. “Oregon has continually worked to transform health care for more than two decades because good health is foundational to our well-being. Good health can help students reach their goals, allow their parents to work, and even bring families closer together. I will continue working until every Oregonian has access to high-quality, affordable health care.” The Oregon Health Plan is the largest health plan in the state. It provides integrated health care for 1 in 4 Oregonians who are struggling to make ends meet. In some rural counties, as many as 40 percent of people rely on the Oregon Health Plan.
Sen. Ron Wyden, who picked up the gauntlet so Oregon could get the waiver approved before President Obama left office, said, “Oregon’s successes in pioneering new approaches is why I worked to make sure Oregon’s waiver renewal happened before the end of the Obama administration, ensuring that Oregonians across the state continue to benefit from a coordinated care model that adds up to proven results of better care, lower costs and fewer visits to the hospital and emergency room. I will also continue to fight back against policies that compromise the success of Oregon’s health system transformation in the weeks and months ahead.”
The Senate Republicans in Oregon responded to the news about the Medicaid waiver and urged the governor to adequately fund programs for seniors and veterans.
"The Medicaid extension waiver is welcome news because it gives us breathing room to markdown non-essential programs and eliminate harmful government waste,” they said. “The governor talks about providing healthcare for all but she is holding hostage our seniors and our veterans, despite surging revenues, by slashing much-needed, reliable programs. These dangerous cutbacks for seniors and veterans are not only unnecessary, but contradicts her promises to Oregonians."
Diane can be reached at [email protected].
