Sponsored by Lane Powell

Diagnosis unknown: Will a health exchange help?

| Print |  Email
Articles - December 2011
Tuesday, November 15, 2011

 

 

1211_DiagnosisUnknown_04
“I’m hoping to be one of the exchange’s first customers,” says Jose Gonzalez, a Salem realtor and member of the Exchange Board. But, he says, keeping health-care costs down is also a matter of “personal responsibility.” 
// Photo by Randy Johnson

Small-business and consumer advocates raise their own concerns about affordability and accessibility. Outreach to rural and minority communities will be a challenge, says Gonzalez. He would also like to see the small-business tax credit expand to businesses with employees making up to $75,000. “We hope no business is priced out because they want to attract good employees,” he says.

Back to the million-dollar question. Will the exchange help control or drive down the cost of health insurance? That has yet to happen in Massachusetts or in Utah, where small-business insurance inside the exchange is actually more expensive than outside. As for Oregon — in October, the consumer advocacy group OSPIRG released a nationwide study of exchange initiatives, ranking the Oregon law a B minus. One weak point, says Laura Etherton, OSPIRG’s health policy advocate, is “the legislative language failed to direct the exchange to lower costs.”

The exchange will eventually have an impact on cost, just not directly, King and others respond. That’s in part because because federal law requires identical plans sold inside and outside the exchange to have identical premiums. Also, as King points out, the Oregon Insurance Division must approve all health-insurance rates and increases. As a result, Oregon already boasts “the most robust rate approval process in the nation,” according to King. What’s more, Oregon isn’t Kansas, which is one of several states that has only one small-business carrier. About seven carriers serve Oregon’s small group market.

In short, since Oregon is already home to a competitive yet heavily regulated insurance market, the exchange on its own is unlikely to bring prices down. Why isn’t that a deal killer? Contrary to popular opinion, says King, the reason insurance rates are increasing 5%-10% a year isn’t because carriers “are taking the money and pocketing it.” Instead, he says, “service delivery reforms” are the key to controlling health-care expenses.

Unlike Massachusetts and Utah, Oregon’s exchange is not unfolding “in a vacuum… but is part of a whole chain of things happening to address quality and cost,” says Christofferson. One is the development of a new health-care model called the Coordinated Care Organization, which will integrate physical mental and dental services for more than 600,000 Oregonians under the Oregon Health Plan. Subject to approval by the Legislature, the first CCO would launch next July, with a projected savings of $239 million next biennium. Then there is the “health-engagement model,” a pilot available through the Public Employees Benefit Board, linking health coverage to behavioral changes by the participant.

As these and other new initiatives get established, King says, the goal is to fold them into the exchange, where application on a larger scale will further reduce the cost of care. In 2016, the exchange will be open to businesses with 100 employees, and in 2018 to firms with more than 100 employees.

But first things first. “Coming out of the box, with zero enrolled, we can’t negotiate,” King says. “Once I get 300,000 lives in there, we’ll have leverage to move the market.” According to Sabrina Corlette, a research professor at the Health Policy Institute and Georgetown University in Washington, D.C., Oregon is “at the vanguard of the rest of country” precisely because officials are thinking about the exchange “as a mechanism to get delivery system reforms.”

But whether enough businesses and individuals will enroll, whether federal health law will be overturned, and whether the exchange will languish as little more than a web portal, are the uncertainties clouding the future. In that regard, Chris Ellertson, president of Health Net Health Plan of Oregon Inc., speaks for both insurance carriers and purchasers when he says: “We believe there’s going to be some good that comes from the exchange. But there are a lot of question marks, a lot of things that are hard to predict.”

Linda Baker is the managing editor of Oregon Business. She can be reached at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .



 

More Articles

Preserving the Legacy

July/August 2015
Monday, July 13, 2015
BY KIM MOORE | PHOTOS BY JASON E. KAPLAN

A New York floral and gift business takes on the iconic Harry & David brand.


Read more...

Flattery with Numbers

July/August 2015
Friday, July 10, 2015
BY JOE CORTRIGHT

The false promise of economic impact statements.


Read more...

Department of Self-Promotion

Linda Baker
Tuesday, August 04, 2015

061715-awards1Oregon Business wins journalism awards.


Read more...

Photo Log: Shooting 10 innovators in rural health care

The Latest
Monday, August 03, 2015
007blogBY JASON E. KAPLAN | STAFF PHOTOGRAPHER

You may have noticed the photos of our rural health innovators departed from the typical Oregon Business aesthetic.


Read more...

Downtime with Debra Ringold

July/August 2015
Monday, July 13, 2015
BY JACOB PALMER

Dean of the Atkinson Graduate School of Management, Willamette University


Read more...

Marijuana law ushers in new business age

The Latest
Tuesday, June 23, 2015
062315panelthumbBY KIM MOORE | RESEARCH EDITOR

Oregon’s new marijuana law is expected to lead to a bevy of new business opportunities for the state. And not just for growers. Law firms, HR consultants, energy efficiency companies and many others are expected to benefit from the decriminalization of pot, according to panelists at an Oregon Business breakfast meeting on Tuesday.


Read more...

Reader Input: Energy Overload

June 2015
Wednesday, July 15, 2015

We asked readers to weigh in on the fossil fuel-green energy equation.


Read more...
Oregon Business magazinetitle-sponsored-links-02
SPONSORED LINKS