Governor Kitzhaber Signs Health Exchange Bill

A work group with representatives from health plans, business, advocates, providers and insurance brokers is expected to come up with the essential benefits that will be offered by the exchange
The Lund Report

March 8, 2012 -- Governor John Kitzhaber lauded the bipartisan support by legislators in passing legislation to enact the health insurance exchange, declaring that the exchange will play a pivotal role in improving the quality and health of Oregonians, and, at the same reduce costs. He signed House Bill 4164 in front of consumer advocates, business and healthcare leaders at the Exchange Board meeting this afternoon.

“We all felt from the beginning that it was important for the state to implement and operate its own exchange rather than default to the feds,” the governor said. “It is going to be a central contributor to the success of our larger healthcare reform effort, by setting the standards for plans that they reduce cost, that they maintain quality and that everyone has access to the kind of coverage that they need and deserve in this state."

Once the exchange gets under way, insurance companies will be accountable for service, quality and value, Sen. Laurie Monnes Anderson (D-Gresham) told the board. “The exchange is critical to healthcare and will help expand health coverage and improve outcomes for countless Oregonians,” she said.

School Districts Can Participate

Before the votes were cast, however, legislators included a significant amendment that could impact insurance coverage for school district and community college employees who currently receive such benefits through the Oregon Educators Benefit Board (OEBB).

Starting in October 2015 these groups can leave OEBB and purchase coverage through the exchange.

But that flies in the face of the federal law that created the insurance exchanges. Only small employers, with 50 or fewer employees, can participate starting in January 2014, with employers who have 51-100 employees joining the exchange in January 2016.

Before legislators voted on this amendment, Governor Kitzhaber had conversations with officials from the U.S. Department of Health and Human Services to determine how Oregon could include school districts in the mix, many of whom have more than 100 employees.

“The governor got a commitment from the staff at HHS that they’d work with us,” Rocky King, executive director of the exchange, told board members. “They’ll be working on a pathway that’s acceptable, and at the same time we’ll be working with Senator Wyden’s office and our Congressional delegation. If a waiver is needed, Congress would have to enact a new law.”

School administrators, school board members and school employees must also be consulted about health plan proposals developed by the exchange. “We’ll set up a collaborative effort to really look at this over the next three years,” King insisted. Currently there are 280 school districts throughout Oregon which represent more than 600 bargaining groups.

King called the passage of House Bill 4164 “absolutely moving,” saying it was “the greatest experience he’s ever had with people coming together and sharing the vision” -- business, consumers, labor, insurers and brokers.

Essential Benefits Package Moving Forward

By September, the exchange must submit the essential benefit packages to the federal government -- the bronze, silver and gold options – that will be offered to individuals and small businesses.

Governor Kitzhaber is expected to appoint a 15-20 member work group with representatives from health plans, business, advocates, providers and insurance agents to work out the details.

Unless Oregon comes up with these benchmark benefits, it faces a default mechanism with the federal government making those decisions, Dr. Jeanene Smith, administrator of the Office of Oregon Health Policy and Research, told the board.

“There’s anxiety and concern about the slow pace of the federal government,” said Lou Savage, acting administrator of the Oregon Insurance Division. “The conclusion is that we need to move along, and the message telegraphed to us by Teresa Miller who’s at the center of the wheel is to extend moving forward in a direction that makes sense and is rational as opposed to waiting for the federal government.”

The benefits offered to Medicaid beneficiaries should be developed simultaneously with the private market, according to Dr. George Brown, CEO of Legacy Health System.

That didn’t sound right to Dr. George Brown, CEO of Legacy Health Systems who’s a member of the exchange board.

“It gets to the issue of affordability in the health system,” he said. “We struggle to provide affordable quality care. One of the imperatives for the nation is that we could be looking at a cliff that we could go over with cost. People have the same needs. To me, simpler is better.”

That is a possibility, Smith responded, who reiterated the September deadline imposed by the federal government for the private market. The deadline for Medicaid is much later, she added.

Meanwhile, the Exchange Board, in collaboration with the Oregon Health Policy Board, is expected to oversee this process.

Image for this story appears courtesy of The Oregonian.

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