Sen. Elizabeth Steiner Hayward, D-Portland, has introduced a bill that would force large employers that have full-time employees on Medicaid to pay a penalty to the state that will offset the state’s cost of providing the Oregon Health Plan.
Senate Bill 997 could raise an estimated $60 million and help offset a $917 million hole in the Oregon Health Authority’s budget.
“We don’t want to get people off the Oregon Health Plan. It’s very good insurance and generally better than what a lot of employers offer,” said Steiner Hayward. “We want businesses to pay their fair share.”
Steiner Hayward shared data with the Senate Health Committee from the Oregon Employment Department showing 40,000 Oregon low-income adults who work full time receive the Oregon Health Plan, as well as 11,000 who are Medicaid eligible for some other reason, such as pregnancy or a disability.
She estimated that each member costs $500 a month to insure. Multiply that by 24 months and the state’s 6 percent share for the adults who received Medicaid through the Affordable Care Act, and these fully employed adults cost the state $28.7 million. The state pays a higher share for the other group -- 37 percent, at a cost of $48.8 million.
Her penalty formula would charge large employers for 90 percent of the cost of a modest plan on the health insurance exchange, with proceeds flowing to mental health and public health as well as Medicaid.
The bill will only apply for full-time employees who receive Medicaid because they are low income -- not because of a disability. It will also offer protections against retaliatory measures an employer might take against an employee who receives the Oregon Health Plan. Small businesses with fewer than 50 employees would also be exempt.
SB 997 will likely face opposition from the business community, but nobody submitted either oral or written testimony opposing the bill.
Instead, it had the strong backing of several labor groups, including SEIU, the Oregon Nurses Association and the AFL-CIO.
As with the food stamp program, the labor groups argue these employers are able to offer such low wages and lack of benefits only because the government is picking up the tab for basic needs.
“When employers have low-wage workers on medical assistance programs rather than an employer-based plan, costs are shifted onto the state and taxpayers,” wrote Jessica Giannettino of the Oregon AFL-CIO. “In a budget environment where there already aren't enough resources to fund critical services, we as a state, can't afford to be picking up this tab.”
Steiner Hayward told The Lund Report that a large employer relying on the state to provide Medicaid to its employees had an unfair advantage over competitors that offer good benefits. However, it’s unlikely if someone qualified for free healthcare through the state that they would opt for an employer plan that included premiums, coinsurance and deductibles.
Conspicuously, SB 997 exempts public employers who similarly offer poverty-level wages that make employees eligible for the Oregon Health Plan. That’s a departure from past legislation such as the Paid Sick Leave Act, which guaranteed earned time off for public employees such as home care workers -- many of whom rely on the Oregon Health Plan.
Including these workers would of course reduce the money the state could raise from the penalty, since it would be paying itself. But it could also give the state an advantage over private companies that offer the same services, such as home care agencies.
Chris can be reached at [email protected].
