A Plan for an Oregon Health Insurance Exchange

By Bob Baldwin of Eugene, Oregon. Bob is the president of the classified employees union at Lane Community College (AFT-Oregon, Local 2417) and an accountant by profession.

So, we now have a national health insurance reform plan. Ultimately, it relies on “managed competition”, and allows the states to implement exchange-type systems. So, how should Oregon proceed?

Rather than single-payer, current HCR relies on managed competition, using “exchanges”, where the exchange is essentially a market. The benefit of the exchange is that creates more direct price competition, makes it easier for consumers to compare plans on similar terms, and allows for additional requirements for a plan to be in the exchange, as compared to the statutory standards for insurance sold in Oregon.

Currently, Oregon has two exchanges: the Public Employees Benefit Board (PEBB) and the Oregon Educators Benefit Board (OEBB). PEBB covers state employees; OEBB covers public K-12 and most community college employees. By statute, agencies covered by PEBB/OEBB are not permitted to buy insurance elsewhere. Both Boards design plan specifics, then bid out the plans, so they offer a combination of plans and carriers. All covered individuals pay the same premium, differentiated only by the number of dependants included. This provides a stable pool for the carriers to base pricing on.

See here and here for plan details and prices for OEBB plans. While it is complex, at least all the data, for all combinations of medical and Rx plan options are presented in common form, so they can be compared easily. Related pages provide the same data for dental and vision plans. And criteria for which plans get in the exchange can be set by the Board for that exchange. Of course, anyone not wanting or liking these plans and rates could shop on the open market.

My suggestion would be to do the following:

Advantages:

[For the record, I prefer simply opening Medicare to all, at cost. But that’s a Federal issue, and the immediate question is how Oregon should respond to the new health insurance reform bill.]

Comments

  • ritachisili (unverified)
    (Show?)

    You can get full Medical Insurance coverage at the lowest price from http://bit.ly/91IG44

  • alfredoe (unverified)
    (Show?)

    Hi All, if you want to get tips and ideas in Spanish before you buy your health insurance, please visit http://www.seguroz.com/seguro-medico.html

    Thanks.

  • Brian (unverified)
    (Show?)

    This sounds like a good idea. My wife and I have individual plans from Regence Blue Cross of Oregon. Recently we, like many others, received a packet notifying us that our plans will be terminated July 1 and we'll have to choose from the new Regence offerings they suggested.

    Which offer considerably reduced benefits, albeit at roughly the same cost as our premium now. This, of course, means that Regence has raised its premium price, but not in an open and transparent manner. It's impossible to figure out how much more it will cost us out of pocket because Regence has reduced its benefit package.

    Being in our early 60s with pre-existing conditions (who has been perfectly healthy all of his/her life?) we can't change to another health insurance company. I believe the health care reform provision prohibiting discrimination on the basis of pre-existing conditions doesn't kick in until 2014 or thereabouts. So Regence has us and tens of thousands of other individual policy-holders over a "take it or leave it" barrel.

    No competition. No free market. The proposal laid out in this post would be a heck of a lot better, especially if the marketplace included a true "public option" run by the state of Oregon.

    Last gripe about Regence: their informational materials about the new plans say there is a $2 million lifetime cap on benefits. But this is one of the provisions of the health care reform bill that kicks up immediately -- no more lifetime caps. I've emailed Regence and asked why they aren't complying with the law of the land. Seems crazy that new health insurance policies issued after passage of the bill don't reflect its provisions.

  • yokem55 (unverified)
    (Show?)

    I have my wife & children on Regence's individual plan and we got our termination/new plan packet on Friday. For us it worked out to about a 63% increase along with the benefit cuts. About 20% of that is from normal age/annual cost growth, but the other part is that they now charge per child covered by the plan, where before you could have all the kids covered on the individual+dependents policy at one price. We are looking into dropping the kids off the policy and getting them enrolled in Healthy Kids, but that would require crossing our fingers and leaving the kids uninsured for 60 days. Joy.

  • Bob Baldwin (unverified)
    (Show?)

    Brian: Note that even when it kicks in, the new law does allow higher rates based on age (up to triple cost, IIRC). If we adopted the plans as we have in OEBB/PEBB, there is no age or experience based pricing. Only family size affects the total premium cost.

    • (Show?)

      Not sure what you mean by stating that "in OEBB/PEBB, there is no age or experience based pricing. Only family size affects the total premium cost."

      The OEBB and PEBB program annual renewal rates are based almost entirely on the experience (i.e. claims, utilization of the plan by members) of the programs. Although many people like to blame insurance companies for charging "outragious prices" and loading millions of dollars into premiums as "profit" or "margin", the fact is that claims utilization is what drives prices up.

  • Bob Baldwin (unverified)
    (Show?)

    Yokem55:

    There's no good reason to not allow you to buy from the same plans we have. The only issue is Oregon only allows "high risk" individuals in the pool, we get adverse rate impacts (from only people with illnesses joining). Open the pool to individuals and small businesses, and we'd keep a stable pool.

    Then we could focus on cost control at the provider level...

  • Brian Collins (unverified)
    (Show?)

    Bob,

    Great job explaining a complicated issue in straightforward terms. I like your idea of combining the exchange for public employees with the exchange for individuals and small businesses. This would benefit everyone with more insurance options and hopefully reduce some of the divisive rhetoric about public employee benefits. My guess is eventually larger employers will want to join, but this is a good start.

    Brian

  • (Show?)

    A suggestion; include non-profits as well as for-profits that are under 50 employees. There are a lot of great non-profits that struggle over health care for their dedicated employees and have more trouble finding the funds than for-profits.

  • Debbie Johnson (unverified)
    (Show?)

    Dear Bob--unfortunately, you and your fellow union members continue to believe the "bigger the pool the better"--our school district is actually saving millions each year from not being in OEBB--actually saving taxpayer's money!

    <h2>PEBB and OEBB are not "exchanges"--there is no freedom to opt in and out--you are in the "Hotel California" where you cannot get out--just wait until your new rates and drastic plan changes come out of OEBB's April 29th Board meeting--you are getting double digit rate increases and then you will try to negotiate a higher contribution from your employer--good luck given the current funding for education--you also neglect to advise your readers of how much an employee at LCC actually pays out of pocket for their health care premium--you will still get the "public employee vs private sector " negative feedback on that one--</h2>
    • (Show?)

      I wonder if the tone of support for the OEBB/PEBB model will change once today's OEBB approved rate increases for 2010 become public....Providence plans 27-28% increase; ODS plans that majority of school district employees are on...17%-26.6% increase....these increases with some plan changes (i.e. more out of pocket exposure to employees and their families) on top of them.
      I feel sorry for our states educators who have been led down bad road....

guest column

connect with blueoregon