A new publicly funded insurance plan is headed for the final step it needs for state approval, despite concerns about the impact it will have on Oregon’s health insurance market for individuals and small businesses.
The idea is that the new insurance program is very similar to the Oregon Health Plan, Oregon’s version of Medicaid: free health care, provided by coordinated assistance organizations, with no copays, monthly premiums or out-of-pocket costs.
It will cover people earning 138% to 200% of the federal poverty level. That’s too much to qualify for the Oregon Health Plan, but too little to easily afford private insurance. A single person would qualify with an income of between $20,000 and $29,000.
The Oregon Health Authority estimates that 100,000 people will qualify for the new plan, called the Basic Health Program or BHP. The program is a rarely used feature of the Affordable Care Act and is primarily paid for with federal dollars that otherwise go to pay to subsidize their market plans. Oregon public health officials say it will help solve the problem of people turning Medicaid on and off due to small changes in their income. And it will reduce the state’s uninsured rate, according to OHA.
But it has one drawback. OHA expects the launch of the program to increase the monthly cost of health care for many people who buy insurance from the individual and small business market (healthcare.gov).
Rather than expanding access, this overly complex and untested effort could result in more Oregonians no longer being able to afford the coverage, wrote Jeff Collins, president of Northwest Kaiser Permanente, in a public comment. on the floor.
Leaders at Cambia, the company behind Regence BlueCross BlueShield of Oregon and BridgeSpan insurance plans, also opposed the plan. The company used the example of a family of two adults earning $78,880 a year (400% of the federal poverty level) who could see their premiums rise by $4,800 a year under the new plan.
Most households are unable to absorb this level of increase in insurance prices in light of rent increases, food prices, gas prices and other inflationary pressures, and many may be uninsured, wrote Mary Anne Cooper, Cambias’ director of public affairs and government relations.
In April, OHA commissioned an updated analysis from independent experts to help the agency predict how significant those cost increases will be.
That study predicted that faced with those costs, some 1,800 people will go uninsured because they will no longer be able to afford the higher premiums. And 5,100 people will reduce their coverage, switching to plans that cost less per month, but could leave them with higher medical bills.
The OPB received the full analysis through a public records request.
In public meetings and in interviews, OHA staff have defended the primary health program. They said the premium increases won’t happen all at once, but will be spread out over several years.
The Oregon Health Policy Board, the oversight body of the Oregon Health Authority, was scheduled to vote this week on submitting the state’s Basic Health Program Blueprint for federal review.
Now, the OHA says it delayed that vote and submitted the project to the feds, until Sept. 12.
The Oregon Health Policy Board will meet again on Tuesday to review public comments on BHP and again on July 18 for a more in-depth discussion of unintended negative consequences for the market.
The timing of the launch of the primary health program is a critical detail.
The program is meant to catch Oregonians who would otherwise lose Medicaid coverage as federal officials reduce higher payments states have received during the pandemic. It is due to launch by July 2024. If the program is not launched in time, more people will be kicked off Medicaid or the state health authority will have to find far more state dollars to keep them enrolled.
OHA is required to formally consult with the nine federally recognized tribes of Oregon on any changes to the state’s Medicaid program or the health insurance market. Health authority leaders say they delayed the vote to accommodate dates requested by tribes for consultation on the program.
OHA spokeswoman Amy Bacher said the agency expects to get federal approval by February with the delay.
Why should Oregon create a primary health program?
Oregon Health Authority staff proposed creating a primary health program last year as they began to look ahead to the end of the COVID-19 pandemic. During the public health emergency, the feds had ended annual income controls for people on Medicaid, allowing them to stay even if they no longer met the program’s poverty line.
State health officials have brought data to the Oregon Legislature showing that policy’s impact on the pandemic: Fewer people signing on and off Medicaid. Before the pandemic, more than a third of people who signed up for the Oregon Health Plan were repeat customers who had used it within the last year. By 2021, it had dropped to just 8%.
The Medicaid dropout rate is a long-standing nationwide problem. It often affects working-age adults earning about minimum wage with irregular hours or multiple part-time jobs. Their earnings are hovering around the Medicaid eligibility limit, and they may lose health insurance when their income increases slightly.
Purchasing individual coverage can be too expensive or impractical for people in these situations, and often people end up back on Medicaid within months when their income drops again.
In December, a task force created by the state legislature recommended the agency go ahead and seek federal approval.
Many of the people who will qualify for it, an estimated 55,000 Oregonians are currently enrolled in the Oregon Health Plan, thanks to a temporary expansion that allows people to stay on Medicaid even if their income has increased slightly.
But the rollout will also move about 35,000 people and tens of millions in federal funding out of the individual state market.
Over time, this will increase the monthly payments for some people who purchase individual insurance who don’t qualify for the new plan.
Essentially, many more poor people in Oregon will have stable, publicly funded health care, but at the expense of some middle-class Oregonians who pay more for private health insurance every month.
Why these premium increases will take effect is determined by how the market and federal subsidies will change as the poorest consumers leave. After accounting for government subsidies, the cost of the silver plans won’t change much, while the bronze and gold plans will be more expensive.
Oregon has attempted to get around the problem by asking the federal government to change the formula for calculating benefits for Oregonians who get their insurance through the healthcare.gov marketplace. Records show the feds denied that request in late January, saying it wasn’t technically feasible.
OHA staff considered a few other options but concluded they were too expensive for the state. When state lawmakers authorized the agency to pursue a primary health program, they provided $120 million in one-time funding to help with the transition period and rollout, but clarified they were not providing any new state funding in course for it.
For most consumers with Bronze and Gold plans, expected increases are about $25 a month, but for about 10% of consumers in the private insurance market, their monthly payments could increase by $100 or more.
The new free health care proposal has attracted little attention
People who have higher incomes and those age 55 and older are more likely to see their insurance premiums rise by $100 dollars a month or more.
For a plan that will make healthcare free for 100,000 people and less affordable for many more, public commitment has been relatively low. Only six members of the public submitted comments, and reporters were the only members of the public at the two meetings the OHA held in May.
And the agency has received just 41 public comments on the primary health program since May 1. Thirty-five were in favor, five were against and one was neutral. Most came from organizations, not individuals.
Many safety net clinics and health care reform advocacy groups have written in support of the plan, including OSPRIG, the Oregon Nurses Association, and the Oregon Primary Care Association. Two of Oregon Health Plan’s largest providers, CareOregon and PacificSource, also support it.
I was impressed with my son and I’s excellent experience when we were covered by OHP, wrote Silke Akerson, one of the supportive commenters. I was equally appalled at how expensive insurance is on the market for a product that covers far less than OHP and has absurdly high deductibles. I had a lot more trouble accessing health care in times when I was on a higher income and no longer qualified for OHP.
OHA has released the slide deck for its staff presentation to the Oregon Health Policy Board on July 11. That presentation only mentions BHP supporters.
And while it includes a summary of market impacts, the OHA slides fail to mention that two major insurers, Cambia and Kaiser Permanente, have sent public comments asking the state to halt the rollout, citing its disruptive effect on the market.
Health officials say failure to roll out the basic health program is also risky.
OHA staff estimates that the primary health program will help about 20,000 people who would otherwise be uninsured now that pandemic-era Medicaid rules have expired. The agency expects an additional 11,000 currently uninsured people to enroll in the new plan.
Tens of thousands more will no longer have to pay monthly premiums or deductibles to access care.
Trilby De Jung is deputy director of health policy and analysis at the Oregon Health Authority. She says the costs must be weighed against what happens if the state maintains the status quo.
It was about weighing up who is suffering the most in our state, he said. Who is really bearing the brunt of losing insurance coverage as the public health emergency ends.
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