Return of the Living
Can Oregon bring public health insurance back from the dead?
by Camilla Mortensen
How do you know when something’s dead? The heart stops? Brain function ends? These days it has become more technological than spiritual. But what if you don’t have health insurance? Do you die faster?
Studies show that patients lacking health insurance are more likely to die from car accidents and other traumatic injuries than people who belong to a health plan.
So let’s get to the age-old question: Can you bring something back from the dead? Sorry, we’re not talking zombies here; we’re talking health care.
There is some good news: If you do get sick, Oregon’s got options that you just don’t find in most other states when it comes to health care. There’s medical marijuana, assisted suicide and a public health care option.
OK, so, we don’t actually have a public option. We’ve got the Oregon Health Plan, which covers tens of thousands of randomly selected low-income Oregonians. What we don’t have is a government-run health insurance plan that competes alongside private insurers.
But we could.
Oregon could be the first state to resurrect the public option from the political grave where Americans thought it had been interred. In that independent and nonconformist fashion we like to do things, the Beaver State could lead the way on health care. Sen. Ron Wyden inserted a section into that very long health care bill — the 2,400 or so page “Patient Protection and Affordable Care Act” or, as some like to call it, “ObamaCare” — that lets states waiver out of the national health care bill and come up with their own plan. Essentially, a state legislator could propose a bill with an Oregon public option plan and get it passed and signed by the governor, after which it would be waived in at the federal level. If it met the standards.
Of course it’s never really that easy. As Oregon State Rep. Phil Barnhart says of a plan that state legislators have in the works, “There’s a lot of big ifs.”
So is Oregon going to zap the option to life?
The public option’s not dead.; it’s just resting
Wyden’s not new to health care plans. In 2007, he introduced his Healthy Americans Act, which was going to, as he put it, give all Americans the sort of health care benefits members of Congress get, with access to the same affordable coverage options, regardless of age, gender, genetic information or pre-existing health conditions. The act gained some bipartisan support in the Senate — unusual for a health reform bill — but it wasn’t the bill that went to a vote.
According to Wyden’s Director of Communications Jennifer Hoelzer, “When it became obvious the Healthy Americans Act wouldn’t be the vehicle, we tried to find what worked.”
And you know what they say — legislation’s not dead until it is forgotten. Wyden kept his ideas alive by inserting key initiatives into the package that did pass.
“Let’s say you’re a legislator or a health expert in Oregon,” Hoelzer says. “And you come up with a way that Oregon can do it better than the national health law.” She says that Wyden inserted state waivers that mean states can devise their own models of reform rather than implementing the federal mandates.
States can explore a public option or an alternative to an individual mandate, as long as they ensure coverage for the same number of citizens and offer the same quality of care as in the federal plan. “It can’t just be catastrophic coverage,” Hoelzer points out. That’s when people basically pay a minimal amount to ensure that if they get in a horrible accident or acquire some terrible disease, they won’t go bankrupt. But catastrophic coverage doesn’t cover basic doctor visits and such.
Wyden’s provision could exempt the state from a number of contentious issues in the federal health care plan: the dreaded individual mandate; penalizing employers for not providing coverage; the exact standards required for a basic health insurance policy; the health insurance exchange and the design for how federal subsidies would have to reduce premiums and/or copays for people.
The individual mandate pissed off a lot of people and led to a number of state attorneys general filing lawsuits against the federal bill. It’s a requirement that all individuals who can afford health-care insurance purchase some minimally comprehensive policy. Under Wyden’s provision, Oregon could sidestep the individual mandate if it created its own plan, because the insurance market would be competitive and insurance would be affordable enough that most people will end up buying into the pool anyway. Hoelzer says that when the individual mandate-motivated lawsuits began to fly, Wyden’s response was: “I have this provision in the bill: Don’t litigate, innovate.”
According to information from Wyden’s office, “a state could then collect all of the federal money — the subsidies for premiums, the subsidies for co-pays and the tax credits for small businesses — in total, and put the money into financing coverage for individuals in its own way.”
“We’re saying if you get an exemption you have to do just as good or better for your state,’ Hoelzer adds.
She calls the provision, “an opportunity to be really creative and really innovative.”
The waiver part is necessary, she says, because “federal laws trump state laws.” Or in other words, “you may have this really great plan in Oregon but no one’s going to be part of it if you get fined for not complying with federal law.” But with a waiver from the secretaries of Health and Human Services and the Treasury, a good plan wouldn’t be fined. However, as written, these waivers couldn’t take effect until 2017.
Public option: reanimated?
Oregon used to be known for being ahead of the game on health care reform. Perhaps it still is. Wyden sent a letter Aug. 24 to Bruce Goldberg, the director-designee of the newly created Oregon Health Authority and director of Oregon’s Department of Human Services, telling him, “I wrote Section 1332 specifically with Oregon in mind.” And Wyden also let Goldberg know that he is moving forward with legislation that would allow the waivers to take effect in 2014, and “if the bipartisan legislative leadership and the executive branch were in support, I would like to explore the possibility of Oregon moving forward with a federal waiver even earlier.”
Under Wyden’s provision, a state-run public option would compete with private insurance companies. The state could use the federal dollars it gets to subsidize coverage for low-income Oregonians in the public option and in private plans. That public option everyone thought was dead and buried could come back, better than ever.
Goldberg, a medical doctor, responded to Wyden two days later: “Improving the value of our health care expenditures and making health care more affordable is a key goal of our newly formed Oregon Health Policy Board and Oregon Health Authority.” This, he writes, is consistent with the health care act, “which looks to states to be creative in developing strategies to lower costs and improve the health of their populations.”
He continues, “We are currently working on a value-based benefit package for our health insurance exchange and the type of health-care delivery system reforms to do just that.”
The big ‘if’
Rep. Phil Barnhart says Oregon’s state Legislature had the jump on health care reform. They created the Oregon Health Authority (OHA) and began working on the health insurance exchange before the federal plan came into play. The federal plan calls for the exchange to start in 2014, but Oregon’s could begin earlier.
The health insurance exchange is essentially a central marketplace, conducted through agents or on a website, where the uninsured can find coverage deals and gain access to federal subsidies and tax credits.
The Oregon Health Authority and its Oregon Health Policy Board have been working on a “Comprehensive Plan for Health Reform.” Parts of it are available for public comment at oha.oregon.gov until the end of September. Patty Wentz of the OHA says, “Federal health care reform fits in with what we’re doing here and more.”
Wentz says that as the health reform plan was shopped around, Oregonians identified coverage for the rural workforce as one issue needing attention. The Oregon plan also calls for improvements such as electronic records, reducing health care costs and streamlining the system with an eye to everyone in the state having quality health care by 2015.
OHA created a federally subsidized high-risk pool in July to enable people with existing health conditions to purchase affordable medical insurance until the federal law takes effect in 2014. That’s when private companies no longer can deny coverage based on pre-existing conditions. This pool bolsters the more expensive Oregon Medical Insurance Pool, the high-risk health insurance pool covering adults and children unable to obtain medical insurance due to health conditions.
Barnhart says Oregonians expressed interest in affordable insurance early on in the process. But, he says, “The thing about the public option is that as it’s written, it excludes any program that’s partially funded by the federal government.”
He says a public option “won’t be as strong as it would be as it would be if we can get them to include the Oregon Health Plan into the plan.”
The Oregon Health Plan is how the state distributes its Medicaid funds.
Barnhart stresses that there are “a lot of big ifs” but that “if we can get the ‘ifs’ dealt with, we wind up with a bill coming out in the Legislature.”
“There are huge details that need to be worked out,” Barnhart says. “I can tell you that there are a lot of people in the Legislature that are excited about it and working on it.”
Health care, he says, is also a jobs issue. Barnhart says one of the things that bothers business leaders is the question of how to keep costs reasonable for employee health care. If those costs are under control, then the cost of hiring people to work goes down and helps to get Oregon out of the recession, he says.
“This is not something you talk about when you talk about job creation, the cost of health insurance, but we’re working as hard as we can to get those costs down while still providing good coverage,” Barnhart says.
The Oregon Health Authority is required to submit a health reform plan to the Oregon Legislature in 2011, according to Wentz.
We have a pulse …
Sen. Jeff Merkley — who like Wyden voted for the federal health reform bill — says Oregon already has an example of how the public option could work. “I was advocating fiercely for a public option, because here in Oregon we have a public option on a related thing which is workers’ comp,” Merkley says.
SAIF Corp. is Oregon’s not-for-profit, state-chartered workers’ compensation insurance company. It keeps Oregon’s rates among the lowest in the country, largely because it doesn’t pay federal taxes and it doesn’t have to share profits with stockholders. This means private insurance companies really have to compete.
Merkley says Sen. Sheldon Whitehouse of Rhode Island told him that after that state remodeled its workers’ compensation program based on Oregon’s successful model, workers’ comp costs dropped by 50 percent.
Oregon could do the same thing with health insurance. “The key is you have to have state leadership that is going to pursue this opportunity. There’s nothing about it that’s easy,” he says.
“It’s not an easy thing to launch a new plan,” Merkley says. “It’s not for the faint of heart.”
If Oregon’s Legislature does come up with a public option, it would then require the governor’s signature. Former governor and current gubernatorial candidate John Kitzhaber was an emergency room physician, and according to his communications director Jillian Schoene: “Kitzhaber worked with Sen. Wyden on his amendment to ensure that states continue to be laboratories for innovation in health care — much like Governor Kitzhaber did with the Oregon Health Plan that continues to provide tens of thousands of Oregon families and children with access to cost-effective health care.”
Kitzhaber’s Republican opponent Chris Dudley opposes the national health care legislation, according to his website, on which he also proposes that Oregon’s health issues be solved by engaging “Oregon’s college and professional athletes to raise awareness among parents and kids of the importance of physical activity and a healthier diet at school and home.”
If the Ducks and the Trailblazers can’t solve Oregon’s health care problems, maybe Wyden’s plan to bring the public option back to life can.