• Search

The Oregon Health Plan: Boon or Bust?, Part 1

The Oregon Health Plan: Boon or Bust? by Ellen Pinney

A Brief History of the Plan In 1989, Oregon made national news by passing three pieces of legislation, known collectively as the Oregon Health Plan. The Plan’s chief proponent and architect was then Senate President, now Governor John Kitzhaber, an emergency room physician.

The Plan was controversial. It included an employer mandate—a requirement that all employers contribute to health benefits for employees working over 17.5 hours a week and their dependents.

The Plan was revolutionary. It called for a Health Services Commission, composed of consumers and providers to hold hearings around the State and then to prioritize health benefits from the most to the least important. The funded portion of the prioritized list was to set the standard for all health insurance plans sold in the State.

The Plan was confrontational. It butted directly up against the ideas of medicaid’s powerful chief architect, California’s Congressman Henry Waxman. Medicaid’s intended targeted “categories” were women and children served by welfare, low income elderly and some people with disabilities. Oregon wanted to cover “all people below poverty.”

Medicaid had a mandated package of certain kinds of health benefits. States unwilling to provide the mandated minimum benefits were denied essential federal dollars for their programs. (For every dollar Oregon put into a federally approved Medicaid plan, the feds contributed $3.) Oregon intended to enroll all its Medicaid members into managed care plans.

Medicaid had always required states to make sure consumers could choose any provider who was willing to accept Medicaid. Waxman believed those protections, and others, were essential for people enrolled in Medicaid.

The Oregon Health Plan bucked Medicaid’s “business as usual” operation. When state programs ran shy of Medicaid money, the response in Oregon used to be (and in many states remains) to cut reimbursements to providers or redefine “categories of people eligible” so fewer people qualify for the program.

The Oregon Health Plan was frightening for seniors and people with disabilities. Health services at the top of the list were required to be those that did the most amount of good for the greatest number of people. Where would that leave people for whom one procedure, very costly and rarely done, means the difference between institutionalization or independent living?

The Oregon Health Plan was touted by its supporters as a plan that would lead to universal coverage, establishing a standard of health care to which all Oregonians would have access. At the same time, it was disclaimed by its most rabid opponents as a nazi-like rationing scheme that would leave the most vulnerable—children, seniors and people with disabilities—out in the cold, unable to get the benefits they need to live comfortably.

From 1989 until today (and undoubtedly into the future), the Oregon Health Plan has remained at the center of health policy discussion and experimentation, the subject of numerous evaluations and dissertations, articles and debate, not only in the United States but internationally.

Collectively, Oregonians of all stripes got up and turned the letter of the law into reality.

The Health Services Commission held hearings in a process which set the standard for public hearings, even now. The hearings were in accessible places in major communities throughout the state. They were at consumer-friendly hours, bridging the gap between 4 and 8 in the evening. Daycare was provided on site. Snacks were available. Commission members identified themselves and an explanation of the Oregon Health Plan was part of every hearing. Bilingual flyers, announcing the hearings, were posted in welfare offices and health clinics, and were mailed out to every Medicaid consumer in the State. Public Service Announcements ran on radio and TV.

Members of the public who attended these hearings were very clear. They believed prevention was the most important health service. And they spoke volumes about their unmet health needs—specifically, the needs for mental health care, dental care, eye care and access to prescription drugs; the need for affordability; the need for overall health care in general.

With hearings completed, a prioritized list of over 600 services priced out, and a generous legislative decision made about where to draw the line, Oregon turned to the federal government for approval of its plan. Without federal approval, Oregon could not get the federal matching dollars. The feds hedged. They delayed. National organizations representing people with disabilities and children rallied in opposition. Finally, stipulating numerous conditions, and intent on scrutinizing the plan every step of the way, the federal government gave Oregon a go-ahead. In 1994, Oregon started enrolling the first Oregonians into the Oregon Health Plan.

Rhetoric & Reality How has the Oregon Health Plan stacked up against claims made by both its proponents and opponents? How has it changed over time? Where is it going from here?

Rhetoric: The Oregon Health Plan is a public-private partnership intended to provide universal coverage.

Reality: The public-private partnership evaporated with the weakening and ultimate repeal of the employer mandate in 1997. The State fulfilled at least part of its public commitment—to provide health services to people below poverty. But that valiant effort has made little impact on the percentage of Oregonians without health insurance. One in six (17%) Oregonians were uninsured before the Oregon Health Plan. Today, one in seven (14%) Oregonians remain uninsured.

Rhetoric: The work of the Health Services Commission, the Prioritized List of Services, will set the standard for all insurance plans sold in the state.

Reality: In a strange twist, the courts ruled that the Oregon Health Plan standard of benefits (comprehensive coverage including mental health, prescription drugs, all diagnostic tests and dental care) had to be included in at least one package of benefits among the plans that insurers offered to any Oregon business. In reality, insurers continue to offer only packages that provide much fewer benefits. In addition, out-of-pocket costs for those with private insurance put comprehensive and accessible health services out of reach of thousands of insured Oregonians. The Oregon Health Plan was supposed to provide a floor of benefits, not a ceiling.

Rhetoric: The Oregon Health Plan will get away from Medicaid business as usual. It will no longer cut people off from services. When money does run short, Oregon will cut health services in an open, public legislative process.

Reality: In changes made by the Emergency Board (E-Board), Oregon imposed: premium requirements; an assets test of $5,000; and a three month income test on Oregon Health Plan enrollees. Additionally, the E-Board eliminated full-time college students from the Oregon Health Plan. (Recently, they reinstated coverage only to college students eligible for Pell grants.)

Some 15,000 people lost coverage when those changes were made. In addition, 600 people cannot re-enroll in the Oregon Health Plan each month because they are past due on their premiums. The state will forgive their debts in three years. What no one can compute is how many eligible people give up on ever trying to enroll in the Oregon Health Plan because the application has become too confusing or because they are afraid they will not be able to afford the premiums. Today, 15,000 Oregon children below poverty are uninsured.

Rhetoric: The Oregon Health Plan will no longer cut reimbursement to providers to save money. We should expect more providers to accept Medicaid consumers as a result.

Reality: Access to providers has improved slightly under the Oregon Health Plan. But people on the Oregon Health Plan and Medicaid still have a hard time finding providers within their plans to accept their Medicaid “cards”—in reality 8.5 x 11 sheets of paper that brand them as poor and the ultimate payor as the state. Providers, flooded with thousands of new patients and under the thumb of managed care plans, are under pressure in many ways to move people through their offices quickly. As a result, established, comforting provider-patient relationships are more of a dream now than they were in the old “fee for service” Medicaid program.

Rhetoric: The Oregon Health Plan will focus on prevention as a priority.

Reality: Managed care and providers respond quickly to a call for urgent care, like a broken leg. Not so for prevention. The hardest appointment to make is for health screening or provider consultation, the basis of good prevention. It may take six to eight weeks to get in the door. And doctors are put under pressure by plans to churn their patients out. A half hour is now considered too much time to spend with one patient. Can’t you just hear it? “You (the doctor) have got plenty more patients to see and we (the Plan) get paid only a flat amount per patient per month. It does not enhance our bottom line to provide prevention to these patients. These folks will be required to re-enroll in 6 months. They may be ineligible for coverage at that time, or they may choose a new plan. We have no long-term incentive to prevent their future illnesses.”

Rhetoric: The Oregon Health Plan is not a plan for poor people only. It is a plan which will cover all Oregonians with a basic, prevention-oriented package of health benefits.

Reality: Although the Oregon Health Plan was intended to be much more than Medicaid expansion and a prioritized list of health services, the truth is that the Oregon Health Plan is just that. It is no longer universal coverage. The employer mandate was repealed. When 85% of Oregon’s uninsured are workers and their dependents, you cannot get to universal coverage without requiring all employers to contribute to health care.

Insurance reform, aimed at making insurance company sales and pricing practices more equitable, has moved ahead not only in Oregon but at the federal level and in many other states. It could and should have happened with or without the Oregon Health Plan.

Rhetoric: Voters should pass the 1996 tobacco tax to fund maintenance and expansion of the Oregon Health Plan.

Reality: Only $20 million of the $160 million tobacco tax went to fund “expansion” of the Oregon Health Plan. That $20 million was dedicated to increasing Oregon Health Plan coverage to pregnant women and children under 12 with incomes up to 170% of the poverty level. $23 million was dedicated to a voucher program, aimed at giving working uninsured Oregonians with incomes below 200% of the poverty level a voucher to go out and buy insurance on the private market. This program, known as the Family Health Insurance Assistance Plan (FHIAP) has no limits on out-of-pocket costs, and no requirements for a comprehensive or even prevention-oriented package of health benefits. It is a far cry from what most Oregonians believe the Oregon Health Plan is about. Three-quarters of the tobacco tax was sucked into the general fund, supposedly dedicated to maintaining current benefits for current Oregon Health Plan enrollees.

The Promise of the Plan Opponents of the Oregon Health Plan reading this article might have room to say: “See I told you so ... it’s not working.” But the truth is that the Oregon Health Plan has provided health coverage to 100,000 Oregonians who were previously uninsured. The problems we are seeing with access are more a result of managed care in general, not the Oregon Health Plan in particular. The fact that we have barely made a dent in the numbers of Oregon’s uninsured has a lot to do with an increasing part-time, temporary labor force, a shift in Oregon’s industry and the willingness or ability of employers to continue providing insurance coverage. It has less to do with the barriers the Oregon Health Plan has put up for people below poverty who should be eligible for the program. The vast majority of people below poverty now have insurance in Oregon! The Oregon Health Plan deserves our support. As a taxpayer supported program, it demands our vigilance. And as a promise of a better and healthier tomorrow, it requires our advocacy.

Advocacy opportunities abound for people interested in restoring the dream of the Oregon Health Plan. The Plan is being massaged, recrafted and reshaped even as you read this. The federal government, in a sweeping acknowledgement that the wealthiest nation and the most expensive health care system on earth cannot continue to leave people (particularly children) out in the cold, approved a $24 billion tobacco tax targeted at providing health coverage to children under 19 with incomes under 200% of the federal poverty level. Oregon will get $40 million a year for 5 years to implement that program. Decisions are being made about how to get the biggest bang for our buck.

The dream for universal coverage is not dead yet. We have a Governor who has stated clearly and repeatedly that that is Oregon’s goal. The dream that one day your health plan will give you access to every type of provider licensed or certified to practice in Oregon, and to preventive treatment in the truest sense of the word, must be kept alive.

To get an application for, and information about the Oregon Health Plan, call 1-800-359-9517.

Ellen Pinney is Director of the Oregon Health Action Campaign (OHAC). She can be reached at (503) 581-6830 or 1-800-789-1599.

Share it:

Add to Collection

No Collections

Here you'll find all collections you've created before.