Republican Pushes for Ballot Referendum on Oregon Health Plan Funding Deal

Rep. Julie Parrish is threatening to derail the provider tax, which was negotiated behind closed doors with the healthcare industry, requiring it to come up with most of the state’s matching funds to draw down federal money to support the Oregon Health Plan -- and continue a critical flow of money to hospitals.

Rep. Julie Parrish, R-West Linn, is threatening a ballot referendum to overturn the new funding mechanism for the Oregon Health Plan, saying she doesn’t support taxes on health insurance, although she did support an insurance tax just four years ago.

In 2013, the Legislature passed a reinsurance program with a $3.50 monthly tax on every health plan in order to buffer the market as the Affordable Care Act took effect. The bill passed the Oregon House of Representatives unanimously, with the approval of Parrish and 25 other Republicans.

Assessments on health insurance plans have been a common source of revenue for Oregon for at least the past decade, which have enabled it to provide health insurance to working-class children and spread the cost of insurance around for high-cost patients.

The 2013 bill raised money to help high-cost patients migrate to the individual health market and Cover Oregon from the Oregon Medical Insurance Pool where patients with pre-existing conditions had been segregated before Obamacare.

It was a reduced extension of an older tax which funded OMIP, but it expired at the end of 2016 -- contributing to a double-digit price spike in premium rates for 2017 health plans.

This year, Parrish and the House Republicans lost a budget battle over funding for the Oregon Health Plan. They wanted a one-year budget funded with hospital assessments,  cigarette taxes and e-cigarette taxes.

Democrats would not go along with the House Republican plan, and neither would the Senate Republicans. Sen. Jackie Winters, R-Salem, called it “foolishness.” Instead, the Oregon Health Plan will be assured of funding from a negotiated package of hospital assessments and a 1.5 percent tax on health insurance premiums and coordinated care organization premiums.

The health systems that agreed to these taxes will likely end up making more money from the deal than they pay in, once about $1.5 billion in federal money comes into the state to match Oregon’s share.

“We’re just reinstating a tax that we had before,” said Rep. Mitch Greenlick, D-Portland, the chair of the House Health Committee.

But Parrish is not giving up and has threatened a petition drive to put the provider tax measure directly before voters. “We want agency accountability,” she told The Lund Report. “We think there is another way.”

Democrats, including Rep. Dan Rayfield, D-Corvallis, one of the lead negotiators of the provider tax, and Greenlick accused Parrish of trying to kill the deal because, as a political consultant, she could personally profit from a ballot referendum, whether it’s successful or not.

“I don’t think it’s any coincidence that Rep. Parrish has a political operation,” and can hire herself to promote a ballot campaign, Greenlick said. “She’s not only a representative but a big-time political operative.”

Parrish counters that she’s not the only legislator who gets paid to work on campaigns during the off-season, pointing out that House Majority Leader Jennifer Williamson, D-Portland, is paid to run campaigns to elect more House Democrats.

In the last days of the 2017 session, Democrats have backed House Bill 229, which, if enacted, would require any referendum to appear before the voters in a special January 2018 election, before lawmakers meet for the regular 2018 session.

For the past year, Insurance Commissioner Laura Cali-Robison has spoken openly of the benefit of restarting this program to help bring the volatile individual health market under control.

The 1.5 percent assessment in House Bill 2391 that Parrish is protesting would be passed onto consumers in the small group market and may tick up rates in the large group market, but Cali-Robison has already factored the reinsurance savings into the 2018 rate for individual health plans, lowering them by an average of about 6 percent.

The House Republican budget alternative provided no money to stabilize the individual health market. Parrish now says she supported the 2013 bill to help shift people out of the Oregon Medical Insurance Pool, but didn’t want to keep throwing money at an exchange that hasn’t worked.

Her ballot referral gambit, if successful, could further rock insurers in the individual health market by defunding much of the reinsurance program, although $57 million of the $136 million fund will come from existing sources, not the new tax.

“She’s willing to destabilize the market,” said Greenlick. The insurance assessment also includes $205 million for Medicaid, but it is not just private market insurers who will pay the tax -- CCOs must chip in a contributable amount, too, along with the state worker health plan.

Parrish said she is frustrated that her ideas for bringing down healthcare costs have gotten short shrift with the majority Democrats. She wants to close down the Public Employees Benefit Board and the Oregon Educators Benefit Board and move state workers and teachers either onto the exchange or into the coordinated care organizations now in use for Medicaid.

She says either of these moves would save thousands on premiums per employee, but neither idea is particularly popular with the Democrats’ close allies, the public employee and teacher’s unions.

But one of her ideas is going forward as part of a cost containment package that passed out of the Committee on Ways & Means on Monday evening -- an end to the double-budgeting if a public employee’s spouse is already covered by PEBB or OEBB.

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