State, Federal Health Care Debates Remain in Flux

Oregon legislative leaders Tina Kotek and Peter Courtney want voters to know the fiscal risks of rejecting a tax package to sustain funding for the Oregon Health Plan, as federal lawmakers begin hearings on ways to stabilize coverage and premiums for the individual health insurance market under the Affordable Care Act.

Oregon legislative leaders Tina Kotek and Peter Courtney want voters to know the fiscal risks of rejecting a tax package to sustain funding for the Oregon Health Plan, as federal lawmakers begin hearings on ways to stabilize coverage and premiums for the individual health insurance market under the Affordable Care Act.

On the same day Oregon lawmakers prepared for a January vote on funding to maintain the Oregon Health Plan, a US Senate committee held the first hearing on how to stabilize the individual insurance markets under the Affordable Care Act. Both reflect the unsettled and unsettling condition of key parts of America’s health care system.

Legislators worked Tuesday on a ballot title for a referral sought by GOP Rep. Julie Parrish that could result in voter rejection of a tax package to sustain current spending levels for the Oregon Health Plan, the state’s Medicaid program.  If the tax package is voted down, state officials could face a budget hole of between $300-$500 million to plug during the short 2018 legislative session that starts next February.

An opinion from Legislative Counsel added more potential confusion to the issue that voters could be asked to decide in a January special election. The opinion says the way the referral is written would only eliminate the additional 0.7 percent assessment on hospitals from October 6, 2017 until January 1, 2018. The referral wouldn’t have any effect on the previously approved hospital assessment.

The draft ballot title clearly attempts to raise the specter of the impact of rejecting the tax package on low-income families, children and insurance premiums.

PROVIDES FUNDS CURRENTLY BUDGETED TO PAY FOR HEALTH CARE FOR LOW-INCOME INDIVIDUALS AND FAMILIES AND TO STABILIZE HEALTH INSURANCE PREMIUMS, USING TEMPORARY ASSESSMENTS ON INSURANCE COMPANIES, SOME HOSPITALS, AND OTHER PROVIDERS OF HEALTH CARE COVERAGE.

On Capitol Hill, GOP Senator Lamar Alexander kicked off the first hearing of any kind this year on the Affordable Care Act by declaring, "To get a result, Democrats will have to agree to something – more flexibility for states – that some are reluctant to support. And Republicans will have to agree to something – additional funding through the Affordable Care Act – that some are reluctant to support." Alexander said his priority is on lowering health insurance premiums.

On the day of the hearing, Washington Senator Patty Murray said in an op-ed in The Washington Post that Democrats are willing to work on a bipartisan approach to stabilizing insurance markets. In the op-ed, Murray raised the issue of creating a “public option” to ensure competition to hold down premiums in the individual health insurance market. Capitol Hill observers said that is an unlikely outcome in what already is viewed as a chancy legislative venture in the wake of the Senate’s failed attempts to repeal and replace Obamacare. Conservative groups have already launched a digital ad campaign slamming Alexander’s effort.

A more likely provision may be some kind of reinsurance program to broaden the base to pay for high-cost individuals, which tend to spike overall premium rates.

Alexander expressed hope his committee can produce compromise legislation by the end of September, which is a critical deadline for insurance companies that have to submit plans and prices for individual health insurance markets around the country. Skeptics doubt whether Alexander’s target date is realistic, especially in light of other looming congressional debates to raise the debt limit, approve a disaster relief funding package and approve some kind of FY 2018 appropriation.

For now, the Trump administration is continuing, with reluctance, to make subsidy payments to medical providers as called for by the Affordable Care Act. Insurers have warned that cutting off those subsidies, which essentially compensate for high-cost care for a few individuals, could lead to as much as a 20 percent increase in premiums, effectively forcing some people to drop their policies.

There also isn’t any clear indication how much or perhaps in what form Congress will authorize for Medicaid reimbursement to states in FY 2018. The Obamacare repeal and replacement bill that narrowly cleared the House earlier this year would have slashed $800 billion from federal Medicaid reimbursements over the next 10 years.