Oregon and the ACA’s Medicaid expansion

Oregon Health Plan enrollment grows 72%; unique approach to improved outcomes and cost-containment

oregon Medicaid guide

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 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 is paying the full cost of expansion through 2016, and will always pay at least 90 percent of the cost of covering the newly-insured population.

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 with household incomes up to 133 percent of poverty (CHIP is available for children with household incomes up to 300 percent of poverty).
  • 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 enrollment stood at 626,356.  That number had increased by 450,605 people as of March 2016 – a growth of 72 percent (tied with Colorado for the third highest percentage growth in the country, behind only Kentucky and Nevada). Total enrollment as of Mach 2016 stood at 1,076,961 people.

Prior to 2014, it was anticipated that Oregon would enroll 400,000 new members in the Medicaid program by 2022.  Net growth had surpassed that point in less than two years, although it includes people who were already eligible for Medicaid but hadn’t enrolled prior to 2014. 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.

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.

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 the tab for the newly-eligible enrollees.  There’s no longer a lottery system in Oregon – everyone who qualifies can enroll in the program.

Coordinated Care Organizations – with $1.9 billion on the line

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 is at stake, Oregon has once again set itself up as a Medicaid vanguard – attempting to maximize patient outcomes and quality of care, while minimizing costs. If they’re successful, their model is likely to be widely imitated.

But as of September 2015, there were concerns about the whether or not the Oregon Health Plan would be able to meet the new spending growth target. The population that was already enrolled prior to 2014—mostly children and pregnant women—have spending growth that’s around 6 percent, making it very difficult for the whole program to meet a 3.4 percent goal.

Dispute with FamilyCare

The CCOs have different rates based on the overall health of their members. And in September 2015, Oregon Health Authority retroactively reset rates back to January 2015. 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 calls 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 is expected to reimburse the state for $55 million in overpayments.

Oregon Medicaid

How to apply

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.

Who is eligible

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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