July 1, 2013 -- Whether Oregon’s new health exchange program created under the Patient Protection and Affordable Care Act will lead to lower insurance costs or is a pending death spiral set on a path to implode the market, depends on who you ask.
It’s been s one year since the U.S. Supreme Courtupheld President Barack Obama’s signature health care reform act, more commonly known asObamacare. And Oregon could be ahead of the game. The state Legislature set up the nuts and bolts of the exchange in 2011. Cover Oregon, the state’s version of the health care exchange, is under way and set to start enrolling participants in October.
What that means for individuals and the market will be a true test for Obamacare, as many eyes turn to the state. Perhaps only California will be watched more closely with its large population and hearty debate on the health-care act.
But just what that means depends no who’s doing the talking. Media reports and Oregon’s governor have touted the program as poised to create a healthy, competitive market. A Washington Post headline in May stated it could be the “White House’s Favorite Health Exchange.”
But critics say not so fast.
Despite the projected premiums recently dropping, as reported by the Oregonian,David Hoberg, senior fellow at the conservative think-tank National Center for Public Policy Research, says it won’t last. He said because the exchange is based on a community market, rates won’t vary much between the young and healthy and the sick and old.
“What that means for the young and healthy is that they are going to face higher rates than they would in a relatively unregulated free market,” he said. “Why bother to buy an insurance product that is for them, overpriced.”
Hoberg said this means the pool will be left with older and less healthy participants. That could prompt insurance companies to withdraw from the exchange if they can’t make a profit, he said.
But for now, Oregon is ahead of the game with 12 insurance carriers signed up to sell in the individual market and eight in the small employer market, Cover Oregon spokeswoman Lisa Morawski said.
“We feel like the rates are pretty competitive,” she said, adding Cover Oregon expects 217,000 enrollees in 2014.
Hoberg and other conservatives are skeptical as the nation’s business community and even some labor unions question the costs of the program, though others say Obamacare could be successful in the free market.
“I’m more with the implode camp right now,” he said. “The pressure is going to build to do something about it.”
