Lopsided funding mars governor’s health care proposal
Ruppert Reinstadler, Guest Opinion, Portland Business Journal
April 24, 2009
I just finished the article in the April 17 edition regarding the provider tax to fund the Governor's Healthy Kids program and some additional citizens on the Oregon Health Plan ("Health execs, lawmakers near deal on provider tax.")
I think you short-changed your readers by including only one sentence about other options that have been presented.
The Oregon Association of Hospitals and Health Systems, with support from the health insurance industry, put together a very sound alternative that would broaden the base of the proposed 4 percent tax on hospitals, raise more money and be more sustainable and reliable in the long term. The alternative would levy a 1 percent assessment on all health insurance claims. Everyone who has health insurance coverage (about 2.2 million Oregonians) would be included: individuals, small groups, large groups, self-insured companies, union trust plans and Medicaid Managed Care plans (Oregon Health Plan).
That's fair. Everyone contributes.
By spreading out the tax to more payers, the hospital association's plan also raises more money, even at a lower rate. Gov. Ted Kulongoski's proposed tax would raise a total of $528 million, compared to the hospital association's proposal that would raise $544 million.
Unlike the alternative, Kulongoski's tax picks winners and losers.
The losers are the 1.5 million Oregonians who purchase commercial insurance: individuals, small groups and some large groups. The winners are the 700,000 Oregonians covered by union trusts and the large self-insured companies that the governor would exempt.
Under the governor's plan a fitness club that pays for health care for its workers would pay the tax, but the big self-insured Oregon company that makes athletic shoes would not pay.
A small software development company would pay, but the big self-insured computer chip manufacturing company would not pay. The small building company that pays for insurance for its carpenters would pay, but the big union building trades health plan would not pay.
That's just not fair. And it's not sustainable. More and more large businesses will become self-insured in order to escape state taxes, increasingly piling the burden on small employers.
The Public Employees Benefit Board, which provides health insurance to state workers, voted in March to go self-insured. That means the 120,000 members will now be exempt from paying their fair share of the premium tax.
Not surprisingly, the unions have been very vocal supporters of health care reform, but consistently their position has been, "someone else should pay for it."
Earlier during the legislative session, unions also said, "someone else should pay for it" when administrators proposed expanding the assessment to fund the high-risk pool. Oregon's high-risk pool, for those with pre-existing conditions who are turned down for individual insurance, is paid for by an assessment on commercial insurers.
By expanding the assessment to include union trusts and self-insured plans, they would be able to lower the rate and stabilize the pool. The unions' message there was the same: "We want the benefits but someone else should pay for it."
If health care reform in Oregon is going to work, everyone needs to contribute, not just small businesses. The proposed claims tax is broad-based, equitable and fair.
That's something you can't say about the proposed premium tax.
Ruppert Reinstadler is partner at Coordinate Resources Group, a Portland independent insurance firm specializing in employee benefit plans.
Link to the story: http://portland.bizjournals.com/portland/stories/2009/04/27/editorial2.html
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