State legislators in Oregon have introduced a bill which would essentially eliminate all private health insurance, moving the state toward a single-payer health care plan.
Michael Dembrow (D-Portland) is the chief sponsor of House Bill 3510, the Affordable Health Care for All Oregon Act, which if passed would mark the first use of the “state innovation waiver” portion of President Obama’s health care law, which allows states to experiment with certain alternatives if approved by U.S. Secretary of Health and Human Services Kathleen Sebelius.
The legislation would block all forms of private health insurance in the state. It also states in part, “A health care provider must accept payment from the plan as payment in full and may not bill a patient for an amount exceeding the payment made by the plan.”
Power Invested in Board
In testimony before the Oregon House Health Care Committee, economist Eric Fruits criticized Dembrow’s legislation, arguing HB 3510 invests significant trust in an unelected board which its proponents expect to manage everything better than the marketplace possibly could.
“The legislation makes the state the sole provider of health insurance in the state. Because there is no way to ‘bend the cost curve’ on the consumer side, the only way the state can control costs is by squeezing providers,” Fruits testified. “I have no faith that an unelected yet incredibly powerful board will be able to walk the tightrope of paying providers enough to stay in the state without handing out a windfall to those select few with extraordinary access to the political system.”
Previous Plan Failed
Steve Buckstein, senior policy analyst and founder of the Cascade Policy Institute based in Portland, notes Oregon has been at the forefront of state-level efforts for government-driven health care plans. Donald Berwick, the controversial head of the Centers for Medicare and Medicaid Services, recently commented he sees Oregon as a “beacon for ideas on health care reform.” Berwick said he has been in regular contact with Oregon’s governor, John Kitzhaber, a Democrat.
But Buckstein says the example has not been a positive one.
“Oregon’s ‘example’ consists of the Oregon Health Plan, an attempt to improve coverage of the uninsured, control costs, and expand provider participation. As Cascade’s recent report concluded, the plan failed to achieve any of its stated goals,” Buckstein said.
In 1994, while Kitzhaber was an Oregon legislator, he authored the plan for the state’s Medicaid program reform—which Buckstein says has found few followers.
“If you included Oregon in a random list of five states, you would be unable to pick it out based on any noticeably different results from the other states’ Medicaid programs. No state has followed our approach, either,” Buckstein said.
Cutting Provider Payments
Oregon’s budget situation is demanding it follow the trend in other states of cutting payments to providers. Kitzhaber’s proposed budget for the coming two years slashes payments to health care providers by 19 percent in just the first year.
“Because the Oregon Health Plan has not controlled costs, the governor probably has no choice but to reduce payments and services,” said Buckstein. “In the past, the plan has thrown people off the rolls in order to control costs. Now, apparently the governor hopes to balance the budget through reduced payments and service cuts.”
Buckstein maintains Oregon should move in the direction of consumer-driven health care by removing mandates, allowing Oregonians to purchase insurance across state lines, and encouraging the use of health savings accounts by state employees.
“Oregon government health care leaders hope to go beyond ObamaCare and win a waiver from the federal government for [the proposed] more comprehensive health care approach. But, without any real market discipline, they have no way of paying for such plans,” Buckstein said. “Rather than try to outdo ObamaCare, Oregon should oppose it and move toward using market incentives to both improve access and control costs.”
Sarah McIntosh, Esq. ([email protected]) is a constitutional scholar writing from Lawrence, KS.
“The Oregon Health Plan: A “Bold Experiment” That Failed,” Cascade Policy Institute: http://cascadepolicy.org/news/2010/09/09/the-oregon-health-plan-a-%e2%80%9cbold-experiment%e2%80%9d-that-failed/