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Financials Work For Low-Income ‘Bridge’ Health Plan, State Panel Says

The new plan is meant to maintain coverage gains from the pandemic, but its low reimbursement rates may be a problem.
An employee of the Oregon Department of Consumer and Business Services helps a consumer pick a health care plan on the federal online health insurance marketplace. | DEPARTMENT OF CONSUMER AND BUSINESS SERVICES
December 1, 2022

A state task force says it’s figured out a way to pay for a new health plan for low-income Oregonians not covered by existing government programs. But the new program is expected to have ripple effects on Oregon’s health care system that have some providers concerned.

The 21-member panel — which includes lawmakers, state officials and representatives from health care interests — is finalizing the details for what’s being called a Bridge Health Program. The new program is meant to serve people who earn too much to qualify for the Medicaid-funded Oregon Health Plan, some of whom are expected to lose coverage as the federal government unwinds emergency pandemic measures.

Once finalized, state officials will submit the plan to the federal government for approval under a provision of the Affordable Care Act that allows states to set up an additional health care option for low-income residents. Funding for the new plan will be based on the amount of money that otherwise would have subsidized low-income enrollees using the federal health insurance marketplace.

An analysis by consulting firms Manatt Health and Oliver Wyman presented to the task force in November found that federal funds would cover program costs for the estimated 102,100 Oregonians who will enroll and generate an additional $142.52 million annual surplus. That surplus would be used to build up a trust fund to ensure the program’s sustainability. 

“This is a rational next step in Oregon's over 30-year history of innovation in health policy and access to health care,” Sen. Elizabeth Steiner Hayward, a Portland Democrat who co-chairs the task force, told The Lund Report. She said the program will provide stability for Oregonians with low-paying jobs who lose Oregon Health Plan coverage after picking up a few more hours of work. 

While the analysis indicates the new plan is financially feasible, it could lead to increased premiums on the individual marketplace as well as burden on safety net health services. Health care providers, meanwhile, have raised concerns it won’t pay enough. 

Shifting Coverage

The Bridge Health Program would be available to Oregonians earning more than 138% of the poverty level, or $38,295 per year for a family of four, which is the cutoff point for the Oregon Health Plan. But recipients of the new plan would need to make less than 200% of the federal poverty level to be eligible. 

Proponents say the plan will provide steady coverage and improve health for people who cycle on and off the program due to changes in their income, family situation or administrative hurdles — a dynamic known as “churn.” 

They also say it’ll provide a soft landing for when federal authorities reinstate income eligibility checks for Medicaid recipients, which states had been allowed to pause earlier in the pandemic. 

The number of people enrolled in the Oregon Health Plan grew from roughly 1 million in 2019 to 1.3 million by 2021 as the state stopped checking eligibility, the task force’s draft report notes. Households falling in the 138 to 200% poverty level also saw their coverage rate increase by nearly 10%, the report states. 

The federal government hasn’t given a firm date for when states will have to start checking the income of Medicaid recipients. But state officials earlier estimated that as many as 300,000 Oregonians could be booted off the rolls. 

Disenrolled Oregon Health Plan recipients are projected to be the largest group to transition to the bridge program, with 55,000 switching over after the program is set up in 2025, according to consultants’ analysis. Another 11,300 uninsured Oregonians are expected to enroll along with roughly 36,000 who currently get insurance through the federally subsidized individual market. 

The task force’s draft report states that as those people join Oregon’s new plan, the individual market will be left with a slightly healthier and younger consumer base, with the percentage of people between 45 and 54 decreasing from 19% to 18%. Marketplace consumers would also be more affluent, with 54% of those on the market earning more than 400% of the federal poverty level. 

A healthier consumer base “would initially lead to a slight reduction in premiums across the individual market, though these effects vary by age and rating region,” the report states. 

But consumers will also see the purchasing power of their federal marketplace tax credits used to purchase coverage decline, according to the report. As a result, the lowest cost bronze-level plan premium on the marketplace would rise from $39 to $50 for someone 21 years of age. For someone 64, that’s a $116 to $151 increase. 

Steiner Hayward said disruptions could be minimized by switching the benchmark of federal subsidies from a silver plan to a gold plan. 

“It’s an issue of mitigating the impact on the consumers who are using the marketplace but also maximizing how much the feds are giving us, so that’s all part of the negotiating process also,” she said. 

Consultants cautioned the task force that it’s not certain how Oregon’s health care market will respond to the new bridge plan. Steiner Hayward said the Oregon Bridge Program will require close monitoring, but is encouraged that similar programs in Minnesota and New York have been financially viable. 

New Program, Same Rates

The bridge plan will be structured similarly to the Oregon Health Plan. That has some health care providers concerned. 

Oregonians who enroll in the new program would receive coverage similar to the Oregon Health Plan, and recipients won’t be charged premiums or cost-sharing out of concern that low-income households would skip coverage. The coordinated care organizations that the state contracts with to serve people on the Oregon Health Plan would also be responsible for serving Oregonians on the bridge plan. 

The task force earlier called for the new plan’s reimbursement rates to be higher than those of the Oregon Health Plan, which providers have long complained are too low. But the task force is now recommending the bridge program offer the same reimbursement rates as the Oregon Health Plan to help build up its reserves. 

Sean Kolmer, senior vice president of policy and strategy for the Oregon Association of Hospitals and Health Systems, told the task force in a Nov. 28 letter that hospitals are already struggling financially. 

“In developing recommendations on the allocation of federal BHP (Bridge Health Program) funding, including any surplus above the program costs, we urge the Task Force to prioritize hospital reimbursement that covers the cost of delivering care to the BHP population,” Kolmer said in the letter. “We know from our current experience that anything close to OHP reimbursement levels does not support access in a community.”

The Oregon Primary Care Association has also raised concerns about how another health program with low reimbursement rates would affect Oregon’s 34 Federally Qualified Health Centers. The safety net clinics serve Oregon Health Plan recipients and receive cost-based payments to ensure their fiscal stability. 

The health centers would serve Oregonians on the bridge program, but would not receive the cost-based payments, which the association worries will upend their finances. 

“This isn’t some goldmine for a provider organization,” Marty Carty, government affairs director for the Oregon Primary Care Association. “This is truthfully and transparently based on the cost of providing care to the patient population at every FQHC.”

Carty said that shifting revenue away from safety net clinics through lower payments may impact the programs and services available for their entire patient populations.

Steiner Hayward acknowledged that Oregon Health Plan reimbursement rates “are lower than we’d like them to be.” She also said Federally Qualified Health Centers will need to be watched closely for any potential impact.

You can reach Jake at [email protected] or via Twitter @jakethomas2009.