EUGENE, Ore. – The federal government has approved Oregon’s request to continue innovating the Oregon Health Plan for the next five years, but it’s not giving any extra money to further advance the reforms, the Centers for Medicare & Medicaid Services announced Friday.
The federal approval provides some degree of certainty for the state health plan in the face of a new administration that has promised to repeal and replace the Affordable Care Act. The approval comes just a week before President-elect Donald Trump takes office.
The ACA, often referred to as Obamacare, made sweeping changes to health care in the United States, including expanding Medicaid programs to more people in Oregon and other states that chose to do so. The Oregon Health Plan, Oregon’s version of Medicaid, pays for health care for low-income and disabled Oregonians.
Trump and the Republican-led Congress still would be able to change the Oregon Health Plan at a later date through a change in federal law. But the “waiver” request approved Friday would make it more complicated for them to do that.
Still unanswered, however, is whether the federal government will provide, or whether the state will be able to scrape together, enough money to continue the same level of service to the more than 1.1 million patients now covered by the Ore-gon Health Plan. That’s roughly one quarter of all Oregonians.
The Oregon Health Plan provides health care to 96,000 people in Lane County.
Starting this summer, Oregon must start paying a bigger share of the Ore-gon Health Plan’s budget as the federal government reduces its funding. Democratic Gov. Kate Brown and leading state lawmakers say the state won’t be able to do that without raising taxes.
Still, state leaders and some health care providers presented Friday’s waiver renewal, even without any extra federal funds, as a big victory for Oregon.
“In these times of uncertainty, the waiver provides continuity, security and coverage for Oregonians on the Oregon Health Plan,” Gov. Brown said in a conference call with reporters Friday. “For these Oregonians, who are struggling to make ends meet, it will enable them to continue to receive the necessary and comprehensive health care through the program.”
But state officials acknowledged that the waiver does not protect the Oregon Health Plan from major changes during the next five years.
“If Congress makes changes to the Medicaid program, we still have to comply with those changes,” said Jeremy Vandehey, Brown’s top health care adviser.
For decades, the federal government has sent massive funding to the states for their Medicaid programs.
Oregon spent $6.5 billion on the Oregon Health Plan in the fiscal year ended June 30, 2016. About 80 percent of that was federal money and 20 percent was state money, Oregon Health Authority figures show.
Spending is up from about $3 billion in fiscal year 2012, when the federal government footed 63 percent of the bill, and the state paid 37 percent.
Oregon wanted more flexibility to try new ways of delivering health care to Oregon Health Plan patients, so it has obtained “waivers” from the federal government, exempting the state from the regular federal rules, and setting up alternative rules for Oregon.
In 2012, a five-year waiver from the federal government provided Ore-gon an extra $2 billion – above the regular Medicaid funding – to launch reforms to the Oregon Health Plan, including the creation of Coordinated Care Organizations to manage services for Ore-gon Health Plan patients.
Oregon’s 16 CCOs, including Trillium Community Health Plan in Lane County, are trying to improve patients’ health while curbing the rise of costs, by making sure patients have a regular medical doctor, a dentist, and help for mental health or substance abuse.
The waiver gives Oregon and its CCOs permission to use some money on nonmedical services, such as community health workers to work in the homes of patients with complex medical issues.
With that earlier waiver set to expire in June, Oregon applied to the Centers for Medicare & Medicaid Services, CMS, for an extension of the waiver and an extra $1.25 billion over five years to further advance CCOs’ innovations and to cover some of the state’s cost for Oregon Health Plan patients.
CMS agreed to extend the waiver, effective Jan. 12, 2017 through June 30, 2022, according to a Jan. 12 letter from CMS to Oregon Medicaid Director Lori Coyner.
But the federal government offered no extra money.
“The extension will build on Oregon’s progress and improve the coordinated care model, maintaining Coordinated Care Organizations’ focus on integration of physical, behavioral and oral health care through a performance-driven system aimed at improving health outcomes and restraining cost,” the letter said.
Vandehey, Brown’s health care adviser, said that the state knew the request for more federal money “was a pretty heavy lift, given that in 2012 the state agreed … that those (federal) dollars would not be renewed or extended.”
Without new federal waiver funds, the state is facing a gap of almost $1 billon between projected expenses and revenues in its 2017-19 Oregon Health Plan budget.
Last month, Brown proposed to plug that gap by increasing a tax on hospitals and reinstating a tax on some health insurers. That would raise $535 million. She also proposed to curb inflation-based increases to the CCOs budgets by $94 million.
It’s unclear whether those ideas will fly in the Legislature.
Sen. Richard Devlin, a Tualatin Democrat and key budget crafter, said he expects the governor’s ideas and other unspecified alternatives to be discussed when legislators convene for a five-month session in February. Majority Democrats will need some Republican support in both chambers to raise taxes.
“The reality is we cannot possibly move enough money from other budgets to fill” the health care budget gap, he said.
Without new tax revenues, Devlin said he would expect “dramatic cuts” to the Oregon Health Plan.
“It might have impacts of the type of health coverage people have, on the number of people with coverage,” he said.
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