Health Advocates Ask Oregon to Look Into “Basic Health Plan Option”

Legislation will be introduced during Oregon’s upcoming 2014 session next month instructing the Oregon Health Authority to study the feasibility of creating a basic health plan option.

A basic health plan option would offer subsidized health insurance, maintained and operated by the state. The plan could be a part of Medicaid, or the plan could mirror the state’s Children’s Health Insurance Program, which provides health insurance to a specific demographic by contracting with a private insurer. The ability for states to create a basic health plan option is a provision of the Affordable Care Act.

Eligibility for the basic health option would be limited to people who are under the age of 65, with income between 139 percent and 200 percent of the federal poverty level, who are not offered employee-sponsored insurance meeting the Affordable Care Act’s affordability standards, and legal immigrants who make below 139 percent the federal poverty but are ineligible for Medicaid because they’ve lived in the country less than five years.

The basic health plan option would thus target lower-income adults, and provide what a large coalition of consumer advocates say would be a more affordable alternative than purchasing insurance coverage through Cover Oregon, the state’s health insurance exchange.

“A number of us are worried about the lower income populations and affordability will be a problem,” John Mullin, the Oregon Law Center’s lobbyist, said to members of the House Health Care Committee during a September interim committee hearing.

Alberto Moreno, executive director of the Oregon Latino Health Coalition, estimates that approximately 200,000 recent immigrants, including children, could be part of a basic health option.

“The Affordable Care Act presumes that everyone is taken care of….but they’re categorically excluded” from purchasing healthcare through Cover Oregon, he told legislators.

The earliest a basic health plan option could become operational in Oregon is 2015. Representative Mitch Greenlick (D-Portland), chair of the House’s Health Care Committee, is sponsoring the legislation, which would instruct the Oregon Health Authority to look into a basic health option’s costs, as well as what form the basic health option would take.

It could become a part of the state’s coordinated care organizations, mimic CHIP, or take another form altogether. “We believe that state specific analysis is needed to know how much it could bring down premiums,” said Janet Bauer, a policy analyst at the Oregon Center for Public Policy, which published a brief in support of a Oregon basic health option in March 2013.

In October 2012, the Oregon Health Authority published a short brief on what a basic health plan option would look like in Oregon, concluding that the plan has “some potential” to provide affordable health insurance to low and middle-income people, but was unfeasible to implement due to its complexity, cost, and how it might negatively affect the state’s health insurance exchange.

But since then, the federal government has revised its rules, and there are increasing national studies showing that a basic health option would be a more affordable way for poorer adults to get health insurance. For example, the Urban Institute conducted a national study in 2011 finding that implementing a basic health plan option would reduce the premiums and out-of-pocket costs of poor adults from $1,652 to $196. The Henry J. Kaiser Family Foundation also released a brief saying a basic health option would benefit consumers.