House Health Approves Further Study of Basic Health Plan on Partisan Vote
The march towards more affordable, better quality health insurance for the working poor and new access to Oregon’s legal immigrants took another step forward as the House Health Committee passed HB 4017, but the 5-3 vote on partisan lines underscores the hurdle proponents face before the Basic Health Plan concepts can be put into action.
HB 4017 gives the state money to update its past analysis and get a program to provide health care for the working poor ready for a vote next year. It also declares that the authority for submitting insurance waivers to the federal government rests with the Department of Consumer & Business Services -- not the Oregon Health Authority. “This bill allows us to have a blueprint,” said Rep. Alissa Keny-Guyer, D-Portland.
Rep. Cedric Hayden, R-Cottage Grove, a dentist, opposed the bill despite winning concessions from the legislation’s supporters to remove language that would specifically design a plan that doesn’t include dental.
“I believe that this step is too much, too quickly,” Hayden argued and alluded to primary access problems in some CCOs, such as Trillium Health Plan in his district. “This type of transformation -- we’re not ready for it.”
Rep. Knute Buehler, R-Bend, concurred: “We’re studying the wrong problem. We need to assure that the state can pay for the healthcare programs it already has,” he said, noting the increased costs the state expects to face for the Medicaid program, as the federal government gradually reduces its financial support for the expansion from 100 percent to 90 percent.
Despite the complaints from Republicans that HB 4017 is too much too soon, Keny-Guyer said consumers would actually not be able to sign up for the new plans, which are designed to be made available on the federal online health insurance exchange, until at least 2018 and more likely 2019.
The Legislature would have to vote again to implement the plan.
“[This bill] provides information to the Legislature for it to move forward,” said Jeremiah Rigsby of CareOregon, a company that manages healthcare benefits for Medicaid members and whose representatives played a key role on the stakeholder group that recommended HB 4017.
If Oregon does approve Basic Health Plan regulations, the state would not provide the funding for consumers to purchase the Basic Health Plan insurance products; people would still use the federal subsidies that are now being used less efficiently through the insurance exchange.
The program would carve out a separate risk pool for people eligible for these plans, which would be structured more like coordinated care organizations, but would offer these adults the option of a commercial insurance plan or participation in a CCO, where many of their children are receiving care.
Contrary to Basic Health Plan skeptics in the insurance industry, the remaining risk pool after these low-income adults are carved out will encompass the entire individual health market -- not just those obtaining coverage on the insurance exchange. These new plans would also be accessed on the exchange, and charged the same assessment as existing plans on the exchange, and insurance brokers who assist consumers with signing up will retain their commissions.
Basic Health Plan strategies save money and create plans that cost less by shifting market power from the hospitals and healthcare providers to insurers, and empowering insurers and CCOs to set reimbursement rates the same as Medicare rather than regular private insurance rates, which are much higher than the actual cost of service.
A lack of discretionary income for the people eligible for the Basic Health Plan -- those with incomes below 200 percent of poverty who do not have employer coverage -- leaves many of them unable to afford their medical bills, and the state’s non-profit hospitals, including Providence Health & Services, have been forgiving their debts under their charity programs.
Providence lobbyist Jessica Adamson said her organization supports giving this population the more affordable healthcare envisioned in HB 4017.
Because the lower reimbursement rates will be offset by a reduction in charity costs to consumers who are currently stuck with high-deductible plans -- or who remain uninsured -- the financial blow to hospitals like Providence through lower reimbursements would be softened by more reliable payments. Providence also acts a key provider group in Health Share of Oregon, a role that may continue if Health Share offers a plan to Basic Health consumers. And its insurance arm would have the ability to offer a coordinated health insurance product on its own.
The savings allow recipients of these plans to be insured without having to pay a deductible or copayments, and for a reduced premium, which will likely be set on a sliding scale. For legal immigrants who are below 138 percent of the federal poverty limit, but who do not qualify for the Oregon Health Plan, Basic Health Plan offerings will likely be free, similar to the proposed insurance assistance program for Pacific Islanders, which has near-universal bipartisan support.
Non-CCO insurers wishing to participate in the Basic Health program would have to abide by a fixed rate of medical inflation and adopt coordinated models -- steps Moda Health and Providence Health Plan have already taken to serve the Public Employees Benefit Board.