Oregon will be sticking with the federal health insurance website healthcare.gov for the forseeable future, after a state agency found that switching to another state’s enrollment platform would cost more than paying the feds for use of healthcare.gov.
Pat Allen, the director of the Department of Consumer & Business Services, told the Senate Health Committee on Monday that while the federal government will charge a 3 percent assessment on individual health plans in 2018, or an estimated $31 million, adopting another state’s platform would cost at least $3 million more and include the hiring of as many as 80 people to man the call center and operate eligibility and enrollment from Oregon.
The agency analyzed proposals from three vendors who have successfully operated state portals elsewhere to determine if it might be feasible for Oregon to get its own website back, given rising costs from the federal government for use of its site. Healthcare.gov has been free for the past two years, but next year Oregon’s participating individual health insurance plans will be assessed a 1.5 percent tax, followed by 3 percent in 2018.
Allen clarified to a House Health Committee that the decision was more of a toss-up -- noting the state would be able to operate a much nimbler and customized health insurance marketplace with its own website, for just $3 million more a year.
“We knew that because of the political considerations, the case had to be overwhelming moving forward,” explained Allen. The analysis was such a wash, he said the state would also not likely switch to the federal government now if they had been offered one of these plans earlier.
Although the state insurance marketplace faces new charges from the federal government, those will be offset in a reduction in fees assessed by the state itself. As a holdover from the Cover Oregon days, the state has been assessing $9.66 per plan per month, but that rate will be lowered to $6 per plan per month, reflecting the lower costs for the state’s involvement, as well as new, better-than-expected enrollment, which rose from 112,000 in 2015 to 147,000 by the end of open enrollment for 2016 plans in January.
The decision to stay with healthcare.gov should allay concerns by insurance agents and consumers worried about switching a second time after Cover Oregon was aborted after one year. Healthcare.gov has been up and running for two years, and this year’s enrollment grew beyond expectiations
But at the same time, sticking with the federal website could stymie innovations, such as the more affordable “basic health plan” insurance options for working-class adults. Already, Allen said the state has been forced to do a manual work-around the stodgy healthcare.gov site to implement a special program for Pacific Islanders.
“I appreciate you looking into it,” said Rep. Brian Clem, D-Salem, who saved his barbs for the federal government for not being capable of automatically providing a way for the Islanders to sign up for special plans online.
Under Oregon’s program, the state will pick up the remaining out-of-pocket and premium costs for low-income Oregon residents who would otherwise be eligible for the Oregon Health Plan from the South Pacific islands in the Compact Of Free Association, or COFA. The compact allows these islanders to come and go to the United States since they had been harmed by decades of military involvement, including nuclear bomb testing, but federal law bars these individuals from Medicaid.
“Just because Oregon is not victimizing these people anymore doesn’t mean that every other state isn’t continuing to victimize them. Maybe they should have a box: ‘Have you been abused by the United States government?” suggested Clem. The Pacific Islander community is centered around his district in north and east Salem.
SHOP Delayed Again
Berri Leslie, the administrator of the Oregon Health Insurance Marketplace, told the committee that the federal government also gave Oregon two more years to set up a small business marketplace or SHOP program, pushing the program out to 2019
The program originally had been intended to go live two years ago with the rest of the Affordable Care Act, but technical failures at both the federal and state levels drove the governments to focus on getting a working website for the individual health market. Plans to stand up a web portal enabling employees of small businesses to choose from a variety of plans fell by the wayside.
Allen said his agency would continue to monitor the maturing market for state-based websites to see if options improve dramatically. The state will likely do another deep dive into the concept of its own exchange in three to five years -- 2019 to 2021.
Sen. Alan Bates, D-Medford, an osteopathic family physician, said he had patients coming to him regularly who are overwhelmed by the $5,000 to $10,000 deductibles of the catastrophic bronze plans they purchase on the exchange, and cast doubt on whether the Affordable Care Act will survive under the next president, given the current national political scene.
“I’m not sure the program will exist in three to five years,” Bates said.
An aggregate of leading national polls since May 13 show real estate tycoon and presumptive Republican presidential nominee Donald J. Trump beating former Secretary of State Hillary Clinton, his likely Democratic opponent, in a face-to-face matchup by 0.2 percentage points.
Among the goals for his agency, Allen told Bates, is to educate consumers who regularly use healthcare services, encouraging them to purchase the richer silver plans, which pencil out better than the bronze offerings. Consumers who are below 250 percent of the federal poverty limit -- about $30,000 for a single person or $61,000 for a family of four -- can get their out-of-pocket expenses subsidized if they select a silver plan, which also has a smaller deductible than a bronze plan.