Oregon's Options for Financing Health Care
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Not all states were ready to embrace the Affordable Care Act (ACA) when the legislation passed, but Oregon was. By the second year of ACA implementation, the state had reduced the percentage of its uninsured residents almost 10 points. But policymakers and other stakeholders saw more to be done to make health care more accessible and affordable in Oregon.
With this in mind, lawmakers in the state commissioned a study to look at new ways to pay for health care. RAND researchers, in partnership with Oregon-based researchers from Health Management Associates, conducted a comprehensive evaluation of the options, in comparison to the current system. The three new options were:
- Single Payer Option
- Universal coverage under one state plan, including current enrollees in employer-sponsored coverage, the ACA Marketplace, Medicare, Medicaid, and the uninsured
- Health Care Ingenuity Plan
- A second option for universal coverage based on a state-based system of managed competition insuring all state residents except Medicare recipients and those covered by the Federal Employees Health Benefits, Veterans Health Administration, or Indian Health Service
- Public Option
- A state-sponsored plan to be offered on the ACA Marketplace
Projected Effects of Each Option
The table below shows the projections of how each of the three options would affect health care in Oregon, relative to the status quo in 2020.
|Single Payer Option||Health Care Ingenuity Plan||Public Option|
|Enrollment||Large increase||Large increase||Small increase|
|Financial Barriers||Much lower for low-income residents||Lower for low-income residents||Slightly lower|
|System Costs||Little change||Increase||Decrease|
|Provider Reimbursement||Decrease 10% below status quo||Increase||Decrease|
|Service Availability||Worsens||Improves||Little change|
|State Economy||Increase employment by 0.1%||Increase gross state product by 0.4%, increase employment by 0.8%||Decrease employment by 0.1%|
|Feasibility||Major hurdles||Major hurdles||Feasible|
Implementation would be:
- Somewhat detrimental/difficult
- Somewhat beneficial/possible
The projected effects would be expected to manifest in the following ways:
Single Payer Option
- may achieve universal coverage without increasing overall health care costs substantially
- remove the link between employers and health insurance
- shift the relative burdens of financing coverage among stakeholders
- may pose non-financial barriers to access to care for patients
- face significant implementation hurdles
Health Care Ingenuity Plan
- also attain universal coverage and cut the link between employers and health insurance
- likely increase overall health care costs
- easy for the state to implement without changes to current funding sources
- expand coverage slightly and only directly affect a small share of the population in Oregon
This study broke new ground by combining quantitative methods developed at RAND with a qualitative approach led by local experts on the unique needs of Oregon and state administrative and other considerations.
On the quantitative side, COMPARE offers economic modeling that allows researchers to estimate which health insurance plans people might choose under a variety of policy scenarios. PADSIM is a similar RAND tool that pushes the concept of COMPARE to a new level, allowing researchers to see how hospitals and physicians might respond to an array of changes in how—and how much—they are reimbursed. When combined with TAXSIM (a tax-estimating tool) and IMPLAN (which can estimate other economic impacts), the team could offer the state concrete estimates of how the three policy options would affect coverage and financing, both in the aggregate and for specific population segments.
The qualitative work from the Health Management Associates team buttressed the quantitative analysis by placing the research in context of the legislative history of the state and the regulatory environment. The HMA team analyzed the administrative costs, state and federal regulatory and statutory considerations, and likely implementation issues involved in each option modeled.
By partnering, RAND and HMA were able to deliver an unparalleled analysis to the lawmakers and stakeholders of the state. Though the fate of the ACA itself is uncertain, the study’s tools and approach could examine policy options under different circumstances or for other jurisdictions.