Senator Jeff Kruse - November 22nd, 2013

 Working Hard For You

NOVEMBER 22, 2013

Today is day three of Legislative Days, which is the time all committees in both chambers hold hearings on a quarterly basis when we are not in session.  Generally what happens is we get reports from state agencies on various programs and the implementation of new legislation and we work on preparing the agenda for upcoming Legislative Sessions.  With the even year session being so short (35 days), for the most part we will be dealing with bills of a more technical nature and ones that are non-controversial.  The more complicated issues will be reserved for the 2015 Session and the work has already begun on many of those issues.

To those who have asked why I stopped doing newsletters there are a couple of reasons.  First, the summer and fall are very busy times on the farm and I do have a business to run.  Secondly, a lot of what has been happening (including the “Special Session”) has left me very disappointed and frustrated and in need of more information before I respond.  There are a wide variety of topics I would like to discuss and hopefully more will be revealed over the next couple of months.

For today I want to share some thoughts about Cover Oregon, or the insurance exchange.  I know the exchanges have received a lot of media attention at the federal level and in my opinion we have still not been told the truth by this Administration.  Just one example, I have known for a couple of years people would not be able to keep their current plans under the provisions of ACA, and anyone who knew anything about the bill knew it as well.  I believe this was meant to fail as a way to drive us to the complete government takeover of the health care system.  For those who think this would be a good idea, you really haven’t looked at all of the ramifications of such a move.  But, for now, I will focus on our exchange.

We were one of five states granted federal dollars ($48 million) to develop the technology.  The agreement was we would then share what we had developed with other states, which is a reasonable approach.  The warning that immediately went up is the fact the State of Oregon has a miserable track record when it comes to IT development.  In this case, even though much of the work was contracted out to a company called Oracle, we have held true to our record of failure.  We have been assured all of the problems can be fixed, and maybe that is true over time, but here we are with a non-functioning web site and 400 new government employees to do manual processing.  By the way, this brings the number of employees in Cover Oregon to nearly 500, which is really not the type of job growth we need.

The federal government also gave Oregon nearly 250 million dollars to operate the exchange for two years.  Another pot of federal money in play is the subsidies for people buying insurance in the exchange.  It is on a graduated scale, but everyone up to 400% of the federal poverty level (for a family of four that is an income of $90,000) can get federal dollars to help pay their premiums.  This will, to a degree, offset the premium increases, but only short term.  In two years the operational funds as well as the subsidies are scheduled to go away.  This may or may not happen depending on what goes on in Washington DC.  By law the President is required to present a budget every February, but for the entirety of the Obama administration there has never been a budget passed and the feds have been operating on continuing resolutions.  I think this is intentional as it allows them to continue to spend in any manner they choose and continue to increase the national debt.

Back to Oregon, here is where we stand.  The government will now determine, to an even greater extent, what type of insurance you can buy.  For example, as a 62 year old person I can no longer purchase insurance for just hospital coverage (otherwise known as a catastrophic plan).  Because no insurance carrier can offer plans outside the Exchange that are not offered inside that door is now shut.  This is not what we were told we would be developing, but this is our reality; more and more government control of our lives.

But, even more concerning than what I have detailed above, are the budget ramifications of going ahead with this plan.  In two years the costs of operation the Exchange fall to the state as well as any premium subsidies.  Additionally the Medicaid expansion, which the federal government is paying 100% of for two years, starts falling back to the state general fund.  At that point we will either need to implement major tax increases or make significant cuts to schools.  Neither option is acceptable.

Clearly our healthcare system needs changes, but this is not taking us in the right direction.  Unfortunately our Governor seems determined to be the first state to fully implement the federal act and is fully supported by the Democrat majority in the Legislature.  We have been continually trying to offer alternative approaches, but they fall on deaf ears.  The people of Oregon deserve better.

Sincerely,

Senator Jeff Kruse