Oregon and the ACA’s Medicaid expansion

557,000 enrolled under Medicaid expansion; unique approach to improved outcomes and cost-containment

oregon Medicaid guide

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Oregon was far ahead of the pack on Medicaid expansion and reform.  The state expanded Medicaid (Oregon Health Plan) to cover people with incomes up to 100 percent of poverty more than two decades ago, in 1994.  Budget woes resulted in benefits being scaled back over the years and enrollment was suspended from 2004 to 2008.

But when the Affordable Care Act (ACA) offered states the opportunity to expand Medicaid to everyone with incomes up to 133 percent of poverty (138 percent with the built-in income disregard), it was an obvious choice for Oregon’s legislature and Governor, particularly given the fact that the federal government paid the full cost of expansion through 2016, and will always pay at least 90 percent of the cost of covering the newly-insured population. The legislature passed an omnibus bill early in 2014 that increased Oregon Health Plan’s budget by $1.17 billion (to a total of $14.4 billion) for 2013 – 2015.

Who is eligible for Oregon Health Plan?

  • Adults with household incomes up to 138 percent of poverty.
  • Pregnant women and infants with household incomes up to 185 percent of poverty.
  • Children under age 19 with household incomes up to 305 percent of poverty, regardless of immigration status.
  • The Oregon Breast and Cervical Cancer program is available to women with household income up to 250 percent of poverty (women 40 and older, or younger women who have symptoms consistent with breast or cervical cancer).

How do I enroll?

  • The best way to enroll in Oregon Health Plan is online at HealthCare.gov.
  • You can also contact HealthCare.gov by phone to enroll, starting November 15, at 1-800-318-2596.
  • Residents with certain special-eligibility status can enroll through Oregonhealthcare.gov.
  • You can also get in-person assistance with an application by contacting a community partner.  This link will help you find assistance in your area.
  • Currently enrolled Oregon Health Plan and Healthy Kids members need to renew their benefits annually.  They will receive a notice from the state when it’s time to do this, and the Oregon Health Plan website has renewal forms and full renewal applications available for existing members.

How many people have enrolled?

In the fall of 2013, prior to the launch of the ACA’s exchanges, Oregon’s total Medicaid/CHIP enrollment stood at 626,356. By June 2018, enrollment was 54 percent higher, at 963,857 people. The percentage increase in Oregon’s Medicaid/CHIP enrollment was tenth highest in the country as of June 2018. But it’s noteworthy that enrollment in Oregon Medicaid/CHIP had stood at 1,076,961 people as of March 2016 (a growth of 72 percent over the 2013 enrollment, which was at that point tied with Colorado for the third highest percentage growth in the country, behind only Kentucky and Nevada).

Enrollment in Oregon Medicaid dropped sharply from early 2016 to early 2017, and has climbed only slightly since then. Not coincidentally, Oregon had experienced glitches with its Medicaid enrollment platform prior to 2016, and applicants’ eligibility had not been properly screened. Between March 2016 and August 2017, nearly 300,000 enrollees were removed from the Medicaid program once it was determined that they weren’t actually eligible for benefits.

Prior to 2014, it was anticipated that Oregon would enroll 400,000 new members in the Medicaid program by 2022.  As of September 2018, enrollment in Medicaid expansion in Oregon stood at 557,000 people. But net enrollment growth in Oregon Medicaid/CHIP is less than 338,000 people, and the federal government is footing a much larger share of the bill for people who are enrolled under the expansion program versus the traditional Medicaid program.

Fast-track enrollment

Oregon is one of a handful of states that used a fast-track enrollment process prior to 2014 that let them identify Medicaid-eligible residents based on their participation in other state-run programs. Since their income and immigration status were already verified, the people who were identified as fast-track eligible did not have to go through the full application process for Medicaid.

The state sent out notifications to about 300,000 residents, letting them know they were eligible for Medicaid. People who received one of these letters were able to simply fill out the enclosed form and returned it in the postage-paid envelope to be automatically enrolled in Medicaid. Oregon also had a system that let eligible fast-track enrollees complete the enrollment process by telephone.

Oregon Health Plan history

The Oregon Health Plan is Oregon’s Medicaid program, overseen by the Oregon Health Authority.  The Oregon Health Plan was conceived and implemented in the late 80s and early 90s. Oregon was on the cutting edge of health care reform, addressing the issue of access to healthcare long before most other states.

During that time, physician John Kitzhaber was a state senator and was instrumental in the creation of the Oregon Health Plan (Kitzhaber went on to be Governor of Oregon from 2011 to 2015). During the late 80s/early 90s, Oregon’s uninsured rate was about 18 percent. According to a Gallup data, that rate had dropped to 14 percent by mid-2014, and to just 8.8 percent by mid-2015. That put Oregon third in the nation in terms of percentage drop in the uninsured rate by the first half of 2015.

In 1994, Oregon expanded Medicaid to cover all residents with incomes below the poverty level under a basic benefits package (OHP Standard, as opposed to the OHP Plus program that applies to pregnant women, children, disabled residents, and others who were already eligible for Medicaid). That year, 120,000 newly-eligible residents enrolled, and Portland area hospitals saw a 16 percent reduction in unpaid medical bills.

In 1995, Oregon Health Plan began to add mental health and chemical dependency coverage, although these services were removed from the basic benefits package in 2003. In most states, Medicaid was only available to pregnant women, children, seniors, and adults with disabilities prior to 2014—Oregon was way ahead of its time in expanding basic coverage to everyone living in poverty.

Pre-ACA: Years of budget woes

Over the last two decades, Oregon Health Plan has instituted numerous cost-containment measures, including a requirement that benefits recipients limit their pharmacy usage to a single pharmacy (chosen by the insured member), a disease management program providing case management to clients with specific chronic illnesses, and copays for most adult clients who are not part of exempt groups (tribal members, pregnant women, etc.).  Coverage for vision/hearing, and durable medical equipment was eventually discontinued as the state worked to reduce Medicaid expenses.

In addition, the state began requiring small premiums to participate in OHP Standard, and that led to roughly 40,000 enrollees dropping their coverage because they were unable to pay the premiums (now that Medicaid has been expanded, they are once again eligible for coverage without premiums).

By 2004, considerably budget issues led to a ballot initiative that would have generated revenue for OHP via additional income taxes, corporate taxes, and tobacco taxes.  The ballot measure failed though, and OHP Standard ceased new enrollments on July 1, 2004.  It didn’t open back up again until 2008, at which point there was a lottery to claim 3,000 available spots in the program (tens of thousands of people applied to get one of the spots, and many people applied more than once over the ensuing years).

It was a natural progression for Oregon to accept federal funding to expand Medicaid in 2014.  Coverage is now available for all legally present residents with incomes up to 138 percent of poverty, and the federal government is picking up most of the tab for the newly-eligible enrollees (94 percent in 2018, although this will drop to 90 percent in 2020 and future years). There’s no longer a lottery system in Oregon — everyone who qualifies can enroll in the program.

Coordinated Care Organizations: A $1.9 billion reward for reducing Medicaid cost growth, and a new focus on social determinants of health

In 2012, Oregon Health Plan started using Coordinated Care Organizations (CCOs) which divide the state into 16 regions and include a network of various types of providers who work together to provide all-encompassing care for their clients.  The CCOs coordinate mental, physical, and dental care and the focus is on improving patient outcomes while also lowering total costs for the Medicaid program.

Part of the impetus for the CCO system is a deal that former Governor Kitzhaber struck with the federal government in 2011.  The state had a $2 billion shortfall in its Medicaid budget, and the federal government agreed to give them $1.9 billion over five years — but only if they could find a way to have their Medicaid costs grow 2 percent slower than the national average (taking spending growth from 5.4 percent down to 3.4 percent). Because so much money was at stake, Oregon once again set itself up as a Medicaid vanguard — attempting to maximize patient outcomes and quality of care, while minimizing costs.

Oregon’s CCO Medicaid waiver ran from 2012 to 2017. In December 2017, the Center for Health Systems Effectiveness at Oregon Health & Science University prepared a report analyzing the impact of the waiver. And the state reported in early 2018 that per member per month Medicaid spending had been “at or below sustainable growth targets from 2013 to 2017.”

In 2017, Oregon proposed an extension of their 1115 demonstration waiver, asking for federal approval to build on the success of the CCO model and include a new focus on the social determinants of health and value-based payments. CMS granted approval of the demonstration waiver extension in 2017, and it will remain in effect until mid-2022.

Dispute with FamilyCare

The CCOs were given different rates based on the overall health of their members. And in September 2015, Oregon Health Authority retroactively reset rates back to January 2015 (the state has noted that “limiting state spending growth in order to meet the waiver terms and requirements has been largely a rate setting
task.”) Overall, rates fell by 0.8 percent, but the impact was felt the most by FamilyCare, which has more than 130,000 members and was hit with a 17 percent rate decrease. Oregon Health Authority noted that they “agonized” over the need to retroactively reduce rates for the CCOs, but said that the move was required by the federal government.

Oregon Health Plan and FamilyCare were in mediation for months over the payment issue. In March 2016, the Oregon Health Authority announced that it was proposing a settlement with FamilyCare, but FamilyCare fired back, stating in a press release that the state’s proposed settlement “demonstrate[d] an abuse of power.” FamilyCare also noted that the state had failed to “provide critical information used to develop and calculate the coordinated care organization (CCO) Medicaid reimbursement rates despite multiple requests by FamilyCare” and pointed out that such data had previously been publicly available.

In late March, FamilyCare announced that Oregon Health Plan had rejected the CCO’s offer to resume mediation, and FamilyCare indicated their intent to take legal action on the issue. But in late May, FamilyCare and Oregon Health Plan reached a settlement agreement which called for FamilyCare to drop their litigation, and for Oregon Health Plan to retract their plans to terminate FamilyCare as a CCO. Under the terms of the settlement, FamilyCare was expected to reimburse the state for $55 million in overpayments.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

How to apply in OR

Online at HealthCare.gov or by phone at 800-318-2596.  If you're pregnant, a tribal member, a refugee, or have other special eligibility status, you can apply through OregonHealthCare.gov.

Eligibility: The aged, blind, and disabled.  Also, coverage is available if your household income does not exceed 138% of poverty (185% for pregnant women and infants) and CHIP is available for children with household incomes up to 300% of poverty.

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