Filling in the blanks on long-term funding for the Oregon Health Plan

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Issues and actions in Oregon health today

April 12, 2019

Filling in the blanks on long-term funding for the Oregon Health Plan

More than 1 million Oregonians (1 in 4 state residents) receive health coverage through the Oregon Health Plan (OHP). Last month, legislators reached early agreement on steps to partially fund OHP for the next 6 years. Now lawmakers are considering two more measures that would generate stable long-term funding to fill the rest of the budget gap:

Tobacco tax would save lives and costs

On Wednesday, Governor Brown testified in support of HB 2270, which would increase the price of tobacco by $2.00 per pack and a 65 percent tax on the wholesale price of vaping products. Governor Brown said raising the price of tobacco and e-cigarettes would “improve health and save lives.” A $2.00 per pack price increase for cigarettes will:

  • Reduce cigarette consumption among youth by 21 percent and 14 percent among adults.
  • Save OHP more than $52 million per year in direct health care costs.
  • Prevent more youth from smoking. E-cigarette use among 11th graders nearly tripled in the past 4 years (from 5 percent to 13 percent). Nearly half of all teens who smoke cigarettes started with vaping products.

The tax is projected to raise $346 million. Ninety percent of revenue would help maintain coverage and services in the Oregon Health Plan. Ten percent would support tobacco cessation programs among state and local public health programs, tribes and culturally-specific programs serving Oregon’s diverse communities.

HB2270 Testimony

Behavioral health justice reform bills introduced

New research shows a small group of people frequently cycle through Oregon’s criminal justice and health care systems:

  • Last year, fewer than one in 10 people booked into 12 county jails accounted for nearly one-third of all booking events.
  • Two-thirds of these frequent arrestees are OHP members – they were more than 150 times more likely to use hospital emergency departments and 650 times more likely to be substance users than the typical OHP member.
  • Total utilization of jail and emergency department services costs the state and counties approximately $92 million per year for this complex-needs population who have been booked into jail four or more times in a year.

The Behavioral Health Justice Reinvestment Committee is co-chaired by OHA Director Allen and Marion County Sheriff Jason Meyers and facilitated by OHA’s new behavioral health director Steve Allen. It developed recommendations to address the needs of this group of people with intensive behavioral health issues and reduce the impact their criminalization has on state and local programs.

Two weeks ago House and Senate Judiciary committees introduced legislation (HB 3281 and SB 973) that would fund local and state partnerships to reduce jail bookings, support recovery, provide stable housing, and improve employment for this vulnerable population. The bills would allocate $188 million over three years (through a new grant program overseen by OHA and the Oregon Justice Department's Criminal Justice Division), including nearly $85 million for housing supports.


Employer Health Care Responsibility Act would boost coverage for low-paid workers

Despite Oregon’s health insurance coverage rate of 94 percent, some employers that pay relatively low wages do not provide health care coverage or offer coverage their employees can’t afford. When employers do not provide health coverage – or affordable health coverage – to low wage workers, taxpayer-funded programs such as OHP bear the cost. Or people and families go without health care.

The Employer Health Care Responsibility Act (HB 2269) would require large employers (companies with 50 or more employees) to contribute to employee health coverage in one of two ways:

  • Spend directly on health care services for employees (e.g., pay for a procedure or office visit) or
  • Pay into the Health Care Access Fund, which would contribute $120 million to offset the cost the Oregon Health Plan bears for covering uninsured employees of large companies $329-$397M to increase affordability and access for employees purchasing insurance on the Marketplace.

The bill is the fourth component of Governor Brown’s proposed Medicaid funding package, which takes a long-term approach to stabilizing funding for the Oregon Health Plan. Today:

  • Approximately 250,000 employees (1 in 4 workers) at large companies are either ineligible or not offered health care coverage through their employer.
  • Another 150,000 are offered but not enrolled in employer health care coverage.
  • In the third quarter of 2017, approximately 90,000 Oregonians working part-time to full-time for large employers were enrolled in the Oregon Health Plan. These employees are most likely to work in industries such as health care, retail, food service and hotels.