Expanding health care, state bucked national trend
Peter Wong, Statesman Journal
August 16, 2009
In the depths of Oregon's worst economic downturn in a generation or more, state lawmakers approved the nation's largest expansion of coverage to children and adults without health insurance.
Unlike its five-year transformation of a traditional Medicaid program into a broader Oregon Health Plan, Oregon will begin adding the first of 80,000 children and 35,000 adults onto coverage starting Oct. 1.
New taxes on hospitals and health insurance premiums, matched with federal money, will bring in an estimated $1.1 billion in the current two-year budget to pay for the expansion. They are the only new taxes approved by lawmakers not facing a potential challenge in a statewide election.
What happened in Oregon is notable given that voters rejected a similar expansion during better economic times almost two years ago. That proposal would have been funded through higher cigarette taxes, but tobacco companies spent a record $12 million to defeat it.
Of 13 states that have proceeded this year to expand coverage, Oregon will be adding the most people.
"If you look at battles over health care across the country, Oregon's had to be one that surprised everybody," said Senate President Peter Courtney, D-Salem.
"When our economy is down and unemployment figures are up, we could have just said let's do this some other time. But we hung in there to get more adults and kids covered — and the hospitals and health insurance people came together to help us. So it was a remarkable moment for Oregon's health and its people."
There were long negotiations with hospitals, which resisted Gov. Ted Kulongoski's original proposal for a 4 percent tax on net patient revenue, and with health insurers, which came up with an alternative to tax all health insurance claims.
But the Association of Oregon Hospitals and Health Systems backed the result. The tax will be set at a rate sufficient for all hospitals to recover their payments through higher reimbursements for services. Health insurers also went along, but without a public endorsement of the 1 percent assessment on premiums.
Federal matches through Medicaid and the State Children's Health Insurance Program, which Congress recently expanded, will put up $2 or more for every dollar raised by the state.
The expansion will cover 80,000 of the estimated 116,000 children without coverage, and allow 35,000 more adults to enroll in the Oregon Health Plan, on top of the 25,000 already in the standard portion supported by existing hospital and insurer taxes. Other groups, such as low-income pregnant women and children, are required to be covered as specified by federal Medicaid law.
Oregon had more than 600,000 people without coverage, according to official estimates.
The focus of expanded coverage is children in households under 200 percent of the federal poverty level, and according to Section 27 (3) of House Bill 2116, "if the child is lawfully present in this state." (The 2009 standard is $22,050 for a family of four, so the eligibility level is under $44,100.)
Those in households under 300 percent of the federal poverty level can qualify for subsidized private insurance, as well as those in low-income families who get health insurance through employment.
"The income limits we have now might seem reasonable," said Carlie Jackson of Keizer, a state worker at the Department of Human Services who helps determine eligibility for the Oregon Health Plan. "But the way premiums are, parents cannot afford to pay for health insurance for their kids — and they certainly cannot afford to pay out of pocket for health care. It comes down to what we deal with all the time: a choice between providing food on the table and buying a prescription."
Despite an increase in childhood obesity, children in general do not have the range of diseases found in adults, and Jackson said the program lets medical providers to focus on disease prevention.
Among the beneficiaries will be Mauren Arce, 16, and brother Freddy Arce, 14, who will be attending West Salem High School. They have no current health problems, but Rosa Bermudez, their mother, said Freddy could use dental work. She heard about the pending program from Dr. Jim Lace, a Salem pediatrician who has advocated expanded coverage for children.
"I'm so happy to live here," Bermudez said through her brother, who is the children's uncle. "I congratulate Oregon for this new program."
pwong@StatesmanJournal.com or (503) 399-6745
Link to the story: http://www.statesmanjournal.com/apps/pbcs.dll/article?AID=2009908160331
Building 2, Suite 100
Lake Oswego, Oregon 97035
503-636-2204 | Fax: 503-636-8310
info@oahhs.org
Copyright © 2009 Oregon Association of Hospitals and Health Systems. All rights reserved.