A key committee passed the Oregon Health Authority budget on Thursday afternoon, sending the $19.9 billion budget package to the full Committee on Ways & Means next week -- but doing so without critical Republican support in the Oregon House of Representatives.
Both Rep. Cedric Hayden, R-Cottage Grove, and Rep. Knute Buehler, R-Bend, voted against House Bill 5026, arguing that the Democrats were putting the cart before the horse and passing a budget bill without sufficient Republican support for a separate bill, House Bill 2391, the tax package, which funds a shortfall in the Medicaid budget with new taxes on hospitals, coordinated care organizations and health insurers.
The tax package needs a three-fifths majority to pass the House, which would require at least one Republican if the Democrats vote en bloc.
Buehler told The Lund Report that he objected to a 1.5 percent tax on CCOs and insurance companies, as well as a new reinsurance program designed to stabilize and lower cost increases in the individual health insurance market. “We don’t need to continue bailing out the Cover Oregon debacle,” he said.
Rep. Dan Rayfield, D-Corvallis, however, remained optimistic that Republicans would not be able to maintain their opposition. “We have almost every entity in the healthcare system on board with this, as well as some Senate Republicans,” he said.
Indeed, Sen. Jackie Winters, R-Salem, supported HB 5026, and voted against the House Republicans’ parliamentary tactics to suggest alternative funding proposals.
Rayfield elaborated that all of the CCOs and hospital systems support the increased assessment, which raises the tax on large hospitals for $120 million and creates a new tax on small hospitals worth $90 million. He said the only insurer to oppose the bill was Regence BlueCross BlueShield.
The industry’s support is not totally surprising. All told, the new state taxes for Medicaid will bring in $1.5 billion in federal matching dollars, the bulk of which will flow to the CCOs and hospitals, giving them a guaranteed income rather than leaving them to write off the cost of care for the 350,000 low-income people who would go uninsured if the state ended the Medicaid expansion.
The House Republicans’ strategy mirrors an unsuccessful gambit that Senate Republicans deployed in 2013, holding up a hospital assessment that the industry supported in hopes of extracting concessions from majority Democrats. The Senate Republicans filibustered the bill for about a month before giving up, having achieved very little.
Hayden introduced an amendment that would have funded the agency for just one year, with a small tobacco and e-cigarette tax, a smaller hospital assessment and a one-time pot of money leftover from the old Oregon Medical Insurance Pool, which paid claims for people with pre-existing conditions, but had $50 million leftover when it closed.
All of that money, the result of overpayments from an old reinsurance assessment, was to revert to the health insurers come July, but HB 2391 diverts it to the Department of Consumer & Business Services, which will commingle the funds with the new insurance tax and disperse part of it for the new reinsurance program and part of it to the Oregon Health Authority for Medicaid.
Improving OHA Performance
Hayden won the support of House Bill 2979 in the House Health Committee to force OHA to put members back into CCOs immediately, and keep newly eligible people in open-card no longer than a month. But that bill has not been assigned to the human services budget subcommittee, so Rayfield said he is resorting to more creative tactics to improve performance at the Oregon Health Authority.
The state agency has been plagued by bureaucratic snafus for several years as a result of the Cover Oregon debacle, and it was made public in March that the agency was using a Medicaid eligibility renewal process that was very difficult for Medicaid members to navigate: a lengthy paper application, which resulted in thousands of canceled memberships and disrupted care for many more, while causing accounting chaos for the CCOs.
Even after they were enrolled, it would take weeks for OHA to put eligible people into a CCO, including people who had previously been served by a CCO. In the meantime, the state agency was stranding them in an open-card system with little access to medical care, while reducing the premiums paid to CCOs from 12 months to an average of just 9 months.
Rayfield said that the budget pulls $20 million from the open-card budget, plus another $38 million in inflation reductions. He said this would discourage OHA from over-relying on the open-card system while another metric makes sure that the problem doesn’t get any worse.
OHA will only be able to put 15 percent of Oregon Health Plan members in the open-card system by 2018 and only 12 percent by 2019. There are currently about 150,000, or 15 percent of the total Medicaid population, in the open-card system, which includes a number of individuals who are not eligible for CCOs. Rayfield said only about 40,000 people can be shifted immediately to the CCOs.
FamilyCare CEO Jeff Heatherington said that number could be an improvement, but it should be stipulated that the 15 percent is of the total Medicaid population, not 15 percent of those who are eligible for CCOs -- which is how he believed the Oregon Health Authority could interpret the budget requirement.
“They ought to be down to around less than 5 percent of the CCO-eligible,” Heatherington said.
Hayden, also, continued to balk at Rayfield’s numbers: “Fifteen percent is still too high. My hunch is that the increase is tied to the 115,000 left to redetermine eligibility.”
The Cottage Grove Republican said that the percentage of the total population of people cut out from the CCO system should be single digits, including the people barred from enrollment by federal law, such as non-citizen immigrant women receiving pregnancy coverage.
Sen. Elizabeth Steiner Hayward, D-Beaverton, said that it has been taking OHA an average of 53 days to process applications, which the budget requires them to reduce to 35 days and then 31 days in the next two years.
The Oregon Health Authority and Department of Human Services, under the direction of a 2015 law sponsored by Rep. Nancy Nathanson, D-Eugene, have been working cooperatively to integrate the four primary government benefits that poor people receive, including Medicaid, through a computerized system which will help the state avoid the troubled paper system..
Earlier this week, DHS Director Clyde Saiki said eligibility determinations are being shifted back to the Department of Human Services, which already enrolls people in food stamps, welfare support and child care through their network of offices.
Lastly, the budget also seeks to force the state to make better progress on improving mental health access, directing the Oregon Health Authority to conduct an analysis of provider rates in the state and list recommendations for increasing those rates to attract more providers and allow existing providers to receive more clients. If the agency lacks sufficient funds, the 2018 Legislature may increase this budget.
Reach Chris Gray at [email protected].
