Public Option Could Mean Buy-In to OHP
Sen. Alan Bates plans to introduce an amendment to health exchange legislation
April 7, 2011 -- A public health plan option might still be alive in Oregon after its chances appeared to have died during this year’s legislative session.
Sen. Alan Bates (D-Ashland) said he plans to introduce an amendment to the health insurance exchange legislation (Senate Bill 99) that would allow people to buy into the Oregon Health Plan as early as 2014. He said an amendment by Sen. Ron Wyden (D-Oregon) to the federal health reform law could make a state-based public option possible.
“The option as I envision it would be in the exchange,” Bates said. “Medicaid could evolve into a public option.”
For that to happen, however, the Medicaid managed care plans currently administering the Oregon Health Plan would have to be certified as insurance companies by the Department of Consumer and Business Services. About half are already certified, Bates said.
Consumer advocates, who saw their hopes for a public option dashed in the federal health reform law, were encouraged by proposals for a state-based publicly owned plan. But after the Oregon Health Policy Board submitted three options to lawmakers before the start of this year’s legislative session, the plan never showed up in any of the proposed bills. Those options included a stand-alone plan, one connected to the Public Employees’ Benefit Board and a co-operative plan that would be eligible for federal funding.
“I had hoped we were going to get a public option this legislative session, but right now I’m really worried about us getting a good exchange,” said Felisa Hagins, political director for SEIU Local 49 who sits on the Health Policy Board. “We have to focus on one hurdle at a time.”
Both the stand-alone and the PEBB option could insure up to 27,700 people in 2014 with enrollment ramping up to 114,500 by 2019, based on an analysis for the Health Policy Board last year by consultant Bill Kramer. That same analysis found that an OHP-based public option would be limited to insuring up to 11,800 people in 2014 and up to 45,800 people by 2019 because of smaller provider networks.
The OHP buy-in option would cost the least out of all the options with administrative costs estimated at about $10.9 million in the first year. A public option coupled with PEBB would cost $20.4 million while a stand-alone would run around $24.4 million in the first year.
Laura Etherton, healthcare advocate for the Oregon State Public Interest Research Group, whose group strongly supports a public option, said she too is more focused lately on ensuring that consumers have a strong exchange. Recent amendments to SB 99 concerned her that state law would prohibit the exchange from negotiating with insurers on costs.
“Right now, we look at what we have the potential to affect,” Etherton said. “The exchange could be a really good tool if it’s designed well. If it actually uses the buying power of 350,000 people who are supposed to be in the exchange, consumers and small businesses have the ability to drive out the waste and reduce the underlying cost of care.”
The possibility of expanding the Oregon Health Plan to the general public also faces potential opposition from physicians and hospitals that already accept lower Medicaid reimbursements than they do from commercial insurers. But so far, those groups have yet to weigh-in.
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Three healthcare reform papers: Key considerations for state health exchanges--structure, terms of participation, plan design. http://www.healthcaretownhall.com/?p=3767
A couple of points and a question. The huge majority of Medicaid covered individuals are under a managed care plan. The State is currently working on legislation that would further modify how OHP covered individuals are served by requiring, for example, global budgets and coordinated care organizations as providers. Would the exchange, as this amendment thinks of it, be offering a managed care option only - or the much smaller typical indemnity component called "open card"?
Dear Anonymous,
That is a good point and I agree with it, but it isn't "the" root of the problem. The big main root of the problem is the profit-driven nature of the American health insurance system, where shareholders get rich off of people's being sick.
Regarding smoking and obesity, I recently heard about what I think are called "health engagement plans" or something like that, where your insurer sits down and designs a specific program for you (like smoking cessation, weight loss goals, etc.) for which you can get a reduction in your insurance costs. Sounds like a good idea to me, and I'd like to hear more about it.
I agree, the obscenely profitable insurance industry tells policymakers what is possible and incredibly they act on that advice. This is a chicken-and-egg debate but another root of the problem is marketing of the US junk and fast food industry. Remember the first time you ate a potato chip? If you're my age it was a treat, not a side dish. The turning point came when "Bet you can't eat just one" became the norm. Marketing this stuff has been way too effective for our own good. Yes I believe in personal responsibility but I confess to having been tempted by those "Wouldn't a bacon cheeseburger be good right now?" ads. Free speech is precious but so is good health.
When do we get to people being accountable for thier actions? The biggest waste in the system is the lifestyle choice people are making that put them in poor health. Smoking, obesity are driving medical costs much higher than they should be, but instead of focusing on teh root of the problem we continue to tax, squeze and regulate those providing care.