Stakeholders Want Basic Health Option on Exchange for 2018

A legislature-commissioned workgroup has found a compromise solution that insurers, brokers and providers will be more likely to support, setting a highly-regulated and standardized basic health insurance plan on the exchange, provided by multiple companies and paying providers rates similar to Medicare, while still offering lower premiums and eliminating deductibles and coinsurance for consumers under 200 percent of poverty.

The Oregon Health Authority is putting the finishing touches on the state’s revised designs for a  Basic Health Plan, breaking considerably from earlier proposals that would have simply expanded the coordinated care organizations to cover more working-class adults.

Instead, this population, under 200 percent of poverty, will continue to shop on the federal exchange for subsidized insurance, but the more highly regulated and standardized Basic Health Plans on the exchange will have a more modest premium -- and no deductibles or copayments.

¨We found a way to design the program that benefits Oregon, and allows Oregon to meet its unique needs,”said Janet Bauer of the Oregon Center for Public Policy, a local think tank. She said the CCOs will be free to offer these plans on the exchange, as well as commercial insurers, giving consumers a choice. Moda Health and PacificSource already operate CCOs east of the Cascades, and some CCOs such as Trillium Community Health Plan in Eugene and All-Care Health Plan in Medford sell commercial insurance.

The new Basic Health Plan arrangement will allow these companies to offer their coordinated care models to more people in their areas and expand into new counties. The draft recommendations also require insurers to adopt the reforms of the coordinated care model built around quality metrics and the patient-centered primary care home, while adhering to a 3.4 percent medical inflation rate.

The stakeholder group, created by House Bill 2934, will recommend legislation in 2016 that allows the Department of Consumer and Business Services and the Oregon Health Authority to collaborate with Wakely Consulting and prepare the state to offer the Basic Health Plan to consumers starting in 2018. The new work for the agencies and the ordering of revised studies from the consultants would likely come with a cost of about $45,000.

Bauer said the Basic Health Plan will greatly reduce the cliff that consumers face when they start earning too much for Medicaid. Although heavily subsidized for premiums and copayments, most plans on the federal exchange still have very high deductibles, as compared to the Oregon Health Plan, which doesn’t pass on any costs to the consumer.

More Consumer Choice than Medicaid

The decision to allow consumers greater choice than just a single CCO should eliminate opposition from insurance brokers, whose lobbyist, Doug Barber, has opposed the Basic Health Plan in the past because of the lack of choice. Insurance brokers would also retain a commission for assisting consumers with the purchase of these new plans on the exchange. In the stakeholder group, it was learned that competition was actually a federal mandate.

The plan designs provided by each CCO or insurer will be the same, and current high-deductible plans will go away for people eligible for the Basic Health Plan. But just as CCO coverage benefits are the same, that doesn’t necessarily mean consumer choices are. In Portland, for example, FamilyCare has more private practice physicians in its network, while its competitor, Health Share has better access to Oregon Health & Science University.

The lower costs for the Basic Health Plan seem to come primarily from the increased bargaining power the government regulations will give these health plans with providers, especially hospitals, which will be paid rates similar to Medicare as opposed to traditional commercial insurance rates, which are often higher due to the superior negotiating position of hospitals and other providers.

But by contrast, the Medicaid rates that would have been extended under a strict CCO expansion are often notoriously cited as paying providers less than the cost of their services. Medicare rates are roughly in the midrange of Medicaid and the average commercial insurance rate; the actual contracts will be negotiated between the individual basic health plan carriers and providers.

No Dental Coverage

The plan designs will be much more transparent than what’s currently offered on the exchange, where consumers have complained that certain benefits such as speciality drugs can vary wildly in cost depending on the plan they chose, which they only discover after signing up for the plan; instead each plan must offer what’s already given to Oregon Health Plan members, as set by the Health Evidence Review Commission -- with one exception, the plans will not cover routine dental care.

The decision to pull dental care out of the package caused protests from Jim Francesconi of Moda Health, which had its origins as Oregon Dental Service. “We spent a lot of time this [legislative] session working to improve dental service for the Oregon Health Plan. This sends the wrong message,” said Francesconi, whose organization will likely not support any legislation that does not include dental.

Moda Health and Advantage Dental won a policy victory in the last session by requiring the state Medicaid plan to increase coverage for dentures. Additionally, the Oregon Health Plan restored dental coverage for all adults in 2014. “We fight hard on one hand and take it away in another,” Francesconi lamented.

Martin Taylor, the public policy director for CareOregon, which manages benefits for CCO members, said the Basic Health stakeholder group cut dental out of the equation because of the price tag -- $26 million, which the state would likely have to pick up. “We all want to find a way to pay for dental,” he said.

Taylor argued that the group had been encouraged by Rep. Mitch Greenlick, D-Portland, to hand the Legislature a proposal that would be cost neutral. He strategized that including the costly dental coverage could either compel state politicians from pulling it out of the package or sink the entire concept.

By leaving it out, he said, supporters could make the case to legislators that it really needs to be back in.

Currently, most consumers in this group must purchase a separate unsubsidized dental plan, with a monthly premium starting around $20 a month.

The loss of dental coverage could mean a worse plan for many pregnant women, who are currently eligible for the Oregon Health Plan if they earn below 190 percent of poverty. In that case, they receive full dental benefits. The group had considered taking these women out of Medicaid and putting them in the Basic Health Plan as a way of saving the state money -- something that would likely come under high scrutiny from the Centers for Medicare and Medicaid Services, according to the draft report from Oliver Droppers of the Oregon Health Authority.

Chris can be reached at [email protected] 

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