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Oregon health insurance exchange / marketplace

In OR, 86.6k exchange enrollees, plus 96k off-exchange; Governor resigns, legal battle over exchange intensifies

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  • By
  • healthinsurance.org contributor
  • February 14, 2015

2015 Oregon enrollment

As of February 1, a total of 86,606 Oregon residents had enrolled in private plans through the exchange.

In addition, another 95,859 people have enrolled in ACA-compliant private plans outside the exchange in Oregon.  Off-exchange plans have to follow all of the same rules as on-exchange plans, but premium subsidies are not available outside the exchange.  Within the exchange, 79 percent of the people who enrolled during the first two months of open enrollment (November 15 to January 16) qualified for premium subsidies.

So including both on and off-exchange plans, more than 182 thousand Oregon residents have enrolled in ACA-compliant individual private plans as of February 1.

There have been some discrepancies between the enrollment numbers reported by Cover Oregon and the numbers reported by HHS.  Throughout open enrollment, Cover Oregon has been reporting lower numbers than HHS has for Oregon, but it appears this is due to a delay in carrier reporting, and also an issue with policies that have been selected versus policies that have been paid.  Either way, the difference is small, and will likely work itself out within a few weeks of the end of open enrollment.

Enrollments completed between January 16 and February 15 will have coverage effective March 1.  After February 15, you’ll only be able to enroll in a private plan in Oregon (including off-exchange) if you have a qualifying event.

Cover Oregon and Governor Kitzhaber’s resignation

On February 13, Governor Kitzhaber announced his resignation from the Governor’s office just one month after starting his fourth term.  He’ll be replaced by Secretary of State Kate Brown.  Although the scandals that led to Kitzhaber’s resignation were not related to Cover Oregon, questions are being raised about whether there were any conflicts of interest between Kitzhaber’s reelection campaign and the decision to shut down Cover Oregon and switch to Healthcare.gov.  Oracle (the vendor that built Cover Oregon) contends that there was, and now a congressional committee is demanding documentation to conduct an investigation.

Legislation to dissolve the exchange

SB1, which would dissolve Cover Oregon and transfer remaining duties to the Oregon Department of Consumer and Business Services (DCBS), advanced to the Senate floor on February 10, after being approved (with amendments) by the Senate’s Joint Health Insurance Transition Committee.

But while the passage of SB1 had seemed inevitable given the number of lawmakers who support it, Oracle is fighting to block the dissolution of the exchange, claiming that Cover Oregon owes them $23 million, and that the exchange was using Oracle’s copyrighted code without paying for it.  The state wants to delay Oracle’s attempt to block dissolution of the exchange, because if Cover Oregon comes under control of DCBS, it will be a state agency that is immune from the copyright violation claim.  But if Cover Oregon still exists in its current legal form, Oracle’s claim could be significant.

The legal battle between Oracle and Cover Oregon has been dragging on – without getting anywhere – for six months.  The case started out in the Marion County Circuit Court, but was later moved to a federal court.  On February 13, however, a US District Judge announced that the case would be moving back to the Marion County Circuit Court, and expressed dissatisfaction with the fact that no progress had been made in the case.

Lower rates for 2015

Oregon residents can visit oregonhealthrates.org to see detailed information about the rate review process and the average rates for 2015.  PricewaterhouseCooper LLC tracked 2015 rates throughout the fall, and comparing them with 2014 rates.  In Oregon, the weighted average across all 13 carriers (on and off-exchange) is a rate decrease of 2.5 percent.

And the Commonwealth Fund conducted an analysis of rates for a 40 year-old non-smoker, and found an average rate decrease of 5 percent in Oregon.

But for the cheapest silver plans from 2014, most areas of the state saw a rate hike of around 10 percent for 2015.  Consumers willing to shop around and switch to the new cheapest silver plan are seeing smaller increases – generally in the range of 6 percent.

Enrolling and re-enrolling for 2015

All 2014 policies that were purchased through Cover Oregon terminated on December 31, 2014.  Open enrollment began on November 15 and ends on February 15.  But in order to have seamless coverage, with a new plan taking effect January 1, Cover Oregon repeatedly announced that current enrollees needed to re-enroll through HealthCare.gov between November 15 and December 15.

Somewhere between 65,000 and 77,000 people had private plans through Cover Oregon just prior to open enrollment, and all of them need to re-enroll in order to retain their coverage for 2015 (in most states, auto-renewal is possible, but since Oregon has switched to Healthcare.gov, everyone needs to re-enroll).

For all enrollees – including those who had a plan last year as well as those who are new to the exchange for 2015 – enrollments submitted between January 16 and February 15 will have coverage effective March 1.  So 2014 enrollees who haven’t yet re-enrolled will have a two month gap in coverage, but will be able to obtain coverage for the remaining ten months of the year as long as they enroll by February 15.

The ACA’s penalty for not having insurance does allow for one short gap in coverage of up to three months.  So people who enroll with a March 1 effective date will not face a penalty for 2015, as long as they keep their coverage in force the rest of the year.

Medicaid expansion

Oregon opted to expand Medicaid (Oregon Health Plan) under the ACA, and by mid-October 2013, 56,000 people had already signed up for Medicaid coverage, reducing the state’s uninsured population by 10 percent just two weeks after enrollment began on October 1.

But the state used a system known as Fast Track to enroll many of the newly-eligible people in 2014, basing their eligibility on enrollment in other programs like SNAP.  All of those newly-enrolled people had to re-apply at the end of 2014, and there’s currently a backlog of about 43,000 applications being processed by Oregon Health Plan

Despite the backlog of enrollments, Medicaid expansion in Oregon has certainly been an overall success.  As of January 1, 2015 total enrollment in Oregon Health Plan stood at 990,000.  Of those, 380,000 had enrolled since Medicaid was expanded on January 1, 2014, and the majority of them had completed their enrollment through Cover Oregon.

Successful transition to HealthCare.gov

Following months of efforts to fix the troubled website, Cover Oregon’s board voted on April 25 to switch to using Healthcare.gov rather than continue to try to repair the existing site.  The Cover Oregon website still exists, but redirect visitors to Healthcare.gov.

The supported state based marketplace (SSBM) model means that Cover Oregon will be working together with HHS, with the state retaining some functions and HealthCare.gov being utilized for exchange enrollment.  Tina Edlund, Director of the Oregon Health Agency, was selected in early May to lead the transition.

Following the state’s successful transition to Healthcare.gov for enrollment, the exchange announced in January that 61 employees – mostly in the call center – would be laid off in March and April.  The exchange will retain a staff of 58 people going forward in 2015.

Lawmakers expect to vote this month on legislation to determine the future of Cover Oregon.  SB1 would hand over Cover Oregon’s remaining duties to the Department of Consumer and Business Services (over the Oregon Insurance Division) by mid-2015, and would add more oversight to the operations, including a yearly state audit.  The bill was approved in February by a 10-member Senate committee, and the next step is a vote in the full Senate.

An uncertain future

For now, Oregon has a SSBM, which means that even if the Supreme Court rules against the availability of premium tax credits in states with federally-run exchanges (a ruling is expected in June), tax credits will still be available in Oregon despite the fact that enrollment will be completed via HealthCare.gov.

Lawmakers are generally in agreement that the 2014 model for a fully state-run exchange needs to be revamped via legislative action, but they also do not want to simply turn the exchange over to the federal government, because losing the state-based aspect of the exchange would potentially mean tens of thousands of people would lose their subsidies if the Supreme Court rules that subsidies are only legal in state-run exchanges.

In mid-June, 2014 (after the exchange had decided to switch to Healthcare.gov for enrollment) Cover Oregon announced that they had selected a new executive director, Aaron Patnode.  The hiring of Patnode, who was previously a Kaiser Permanente manager, indicates that the exchange is still thinking long-term, and Patnode’s reputation as a problem solver and “turn-around artist” bodes well for the long-term success of the exchange as a SSBM.

Although in early December lawmakers were already discussing the process for doing away with the exchange, Patnode announced the next day that the exchange is working to offer a website for small businesses to purchase group coverage.  So the ultimate future of Cover Oregon is still up in the air, although Healthcare.gov will likely be the enrollment portal for individuals going forward.

In addition to Patnode, the state also hired “corporate turnaround expert” Clyde Hamstreet earlier this year in an effort to right the failed exchange.  Hamstreet and two assistants worked throughout the summer and the exchange spent upwards of $600,000 on their services.  In a scathing report written in late August, Hamstreet noted that Cover Oregon was “in serious disarray” and had numerous organizational and leadership problems.

But Hamstreet also said that if Cover Oregon continues to exist, “its strengths will flourish.”  The future of Cover Oregon and its governing organization is uncertain, although one of the possibilities suggested by Hamstreet is for the state to partner with a neighboring state to split the cost and administration of state-run exchange technology.

In February, amid news that Governor Kitzhaber was resigning, reports surfaced that indicated Hamstreet worked closely with Patricia McCaig, who was a top adviser for Kitzhaber’s reelection campaign last year.  It’s unclear whether the decision to shut down Cover Oregon was tied to the governor’s reelection strategy, but the issue is currently being investigated by a congressional committee.

Improved access to help online and over the phone

The exchange is utilizing three separate websites during open enrollment, but they are interoperable.  HealthCare.gov is the main enrollment platform for people applying for private plans and for income-based Medicaid.  CoverOregon.com is available to help people find local in-person assistance with enrollment.  In addition, OregonHealthcare.gov helps applicants who are eligible for Medicaid for reasons other than income (disability, pregnancy, etc.), and redirects visitors to HealthCare.gov for enrollment.

There are also two call centers available for residents seeking help over the phone.  The HealthCare.gov call center assist people with enrollment, and the state-run call center (which was all they had in 2014) is able to provide answers to general questions and help people find local in-person assistance.

Cover Oregon has a series of open house enrollment events planned at various location around the state between now and February 15.  Here’s the complete list so you can find one near you.

2014 progress despite challenges

Although the Cover Oregon website was largely regarded as a technological disaster in 2014, things are going much better in the 2015 open enrollment period that is utilizing Healthcare.gov.

Despite myriad technological problems, Cover Oregon had enrolled 105,661 people in private plans by November 3, 2014 (not all of those policies are still active; some enrollees never paid their premiums, and others have cancelled their coverage at some point during the year; significant attrition is always expected in the individual insurance market – the final total was likely somewhere between 65,000 and 77,000 in early November). Of the private plan enrollees, roughly 53 percent were uninsured prior to obtaining a policy through Cover Oregon.

And even with the tremendous technological difficulties experienced by the exchange, Oregon had the seventh highest drop in uninsured rate during the first half of 2014 according to a recent Gallup poll.  The state’s uninsured rate was 19.4 percent in 2013, and had fallen to 14 percent by mid-2014.

Uncovering what went wrong

The FBI and federal prosecutors have launched investigations into the failed exchange – which cost $248 million in tax dollars and was never able to enroll applicants entirely online.  In early June, Governor John Kitzhaber asked Oregon Attorney General Ellen Rosenblum to take legal action against Oracle – the creator of the Cover Oregon website – in order to recover funds spent on the site.

But Oracle is fighting back, saying that officials at Cover Oregon and Oregon Health Authority are to blame for the debacle.  Both sides have sued each other, and the issue is highly contentious.  Following Clyde Hamstreet’s less-than-glowing report about the myriad problems at Cover Oregon, Oracle’s CEO Safra Catz has pointed to the report as evidence that Oracle is not to blame for the exchange’s catastrophic failure in 2014.  Catz asked Oregon’s lawmakers to assist with ending the lawsuit against Oracle, noting in late October that litigation is “not in the best interest of the state or its citizens.”

All things considered, the legal battle between Cover Oregon and Oracle appears to be one that is likely to drag on for quite some time.

On February 18, 2014 four and a half months after open enrollment began, Cover Oregon’s website was finally functional enough for insurance agents and navigators to be able to process enrollments start to finish online.  Although the site was never fully functional for the general public to complete the entire enrollment process online, the availability of some electronic enrollment was a huge improvement after months of relying solely on paper applications.

Despite the fact that Cover Oregon was the only exchange relying solely on paper applications for the first four months of open enrollment, its total enrollment numbers for 2014 were around the middle of the road when compared with enrollment in other states – all of which were using much more efficient online applications for months.

Grandmothered plans can be renewed

Virtually all of the existing 2013 individual policies in Oregon were eligible for renewal into 2014.  Moda Health Plan Inc. and PacificSource Health Plans allowed existing policies to extend until the end of March.  And seven carriers allowed 2013 policies to be renewed until the end of 2014: Regence BlueCross BlueShield of Oregon, Kaiser Foundation Health Plan of the Northwest, Providence Health Plan, LifeWise Health Plan of Oregon, Health Net Health Plan of Oregon Inc., Time Insurance Co. and John Alden Life Insurance Co.

The renewal of 2013 plans into 2014 gave many Oregon residents in the individual market some breathing room as they waited for Cover Oregon’s website to improve.

Oregon is also permitting those pre-2014 plans to be renewed again this fall and remain in force throughout 2015, at each carrier’s discretion.

Exchange worked to cover risk pool members

The Oregon Medical Insurance Pool – a state run high risk pool – closed at the end of December, but the state implemented a temporary medical insurance program that automatically covered risk pool members who were not able to enroll in an exchange plan with a January 1 effective date.

The temporary plan remained in force until March 31, 2014 but ceased operation at that point.  Insureds who were still covered under the temporary program lost their coverage at the end of March, but the risk pool had been working closely with members to get them transitioned to new policies, so there were very few people still on the temporary program at that point.

Cover Oregon’s history

The Oregon legislature authorized a state-run health insurance exchange in 2011, and the exchange developed a formal business plan, which the Legislature approved in February 2012 as a final go-ahead for the exchange. The U.S. Department of Health and Human Services (HHS) gave conditional approval to Cover Oregon in December 2012. The exchange has a 2014 budget of $105.7 million, which will be covered with federal grant money, and $62.4 million budget in 2015 according to a Cover Oregon spokesperson.

Cover Oregon is overseen by a nine-member board of directors, two of which are non-voting members. The board receives input from the Individual and Employer Consumer Advisory Committee. The 19-member committee holds monthly meetings, which are open to the public. The Consumer Advisory Committee was mandated by the legislation that established the state’s exchange.

Committee members are selected by the board and must include individuals or employers who will use the exchange, individuals who will enroll in state medical assistance through the exchange, minority groups, and representatives of organizations that will people purchase insurance through the exchange. All geographic areas of the state must be represented.

Cover Oregon is acting as “active purchaser,” meaning it limits the number of health insurers that can participate in the exchange. Participating insurers are required to offer a bronze, silver and gold plan and have the option to offer additional plans.

Contact the Oregon exchange

Cover Oregon
855-CoverOR (855-268-3767)

More Oregon health insurance exchange links

State Exchange Profile: Oregon
The Henry J. Kaiser Family Foundation overview of Oregon’s progress toward creating a state health insurance exchange.