71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 2227
B-Engrossed
House Bill 2519
Ordered by the Senate July 5
Including House Amendments dated May 4 and Senate Amendments
dated
July 5
Sponsored by Representative KRUSE; Representatives LEE,
MORRISETTE (at the request of Interim House Health and Human
Services Committee)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.
Provides that State of Oregon shall increase access to
{ - standard level of - } { + basic + } health care services
{ + provided through Medicaid, Children's Health Insurance
Program or subsidized private insurance + } for uninsured
Oregonians with income up to { - 200 - } { + 185 + } percent
of federal poverty guidelines. { - Provides that subsidies for
health care services shall be on sliding scale based upon
income. - } Adopts related provisions. Directs Department of
Human Services to seek federal waivers necessary to carry out
provisions of Act. { + Creates Waiver Application Steering
Committee and Leadership Commission on Health Care Costs and
Trends. Provides that current benefit package under Oregon
Health Plan will be continued until revised program becomes
operative. + }
Declares emergency, effective on passage.
A BILL FOR AN ACT
Relating to the Oregon Health Plan; and declaring an emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + Preamble. It is the primary goal of sections 1
to 11 of this 2001 Act to increase access by Oregon's low-income,
uninsured children and families to affordable health care
coverage. + }
SECTION 2. { + Findings. The Legislative Assembly finds that:
(1) The Oregon Health Plan has provided access to health care
services to over one million Oregonians who would otherwise not
have been able to afford health care services.
(2) The Oregon Health Plan has improved health outcomes by
expanding access to timely preventive services and primary health
care services.
(3) In spite of the Oregon Health Plan's important
achievements, thousands of Oregonians still do not have health
insurance coverage, often seeking health care services through
the emergency department late in the course of their illness when
costs are higher and outcomes are less favorable.
(4) The costs incurred by the health care delivery system by
providing health care services through emergency departments are
shifted to patients with health insurance coverage, driving up
the costs of health care services and health insurance for all
Oregonians.
(5) The lack of flexibility in current federal Medicaid policy
forces the state into 'one-size-fits-all' benefit packages and
'all-or-nothing' coverage decisions, preventing the state from
using federal resources to develop a system of subsidies for
public and private insurance coverage based on the relative
medical need and financial vulnerability of those being served.
(6) The lack of adequate reimbursement rates creates unwanted
cost-shifting and barriers to health care providers at all levels
in providing health care services to enrollees of the Oregon
Health Plan.
(7) The current trends in increases in health care costs create
concern for:
(a) The future sustainability of the Oregon Health Plan and the
private insurance market;
(b) The State of Oregon in administering benefit plans for its
employees;
(c) Individuals unable to pay for all or part of the costs of
their health care;
(d) Employers providing health care coverage for their workers
and their dependents;
(e) Health care providers providing services; and
(f) Insurers and other organizations providing health care
coverage.
(8) Complex factors affect the balance between public and
private health care programs and need to be better understood in
order to establish policies that result in necessary access to
health care. These factors include, but are not limited to:
(a) Whether the current structure of Medicare, Medicaid and the
private insurance market is cost-sustainable;
(b) The reasons behind general health care cost trends;
(c) Appropriate reimbursement methods that reduce cost-shifting
and optimize access to providers and plan choices;
(d) Whether public programs for low-income Oregonians that
ensure adequate coverage are cost-effective and provide a
realistic transition to private coverage; and
(e) Whether private coverage that is affordable offers
sufficient benefit choices and is based on a market-based system.
(9) Employer-sponsored health coverage:
(a) Provides coverage for a majority of all Oregonians; and
(b) Must be supported by public policies that remove barriers
to obtaining private health insurance coverage. + }
SECTION 3. { + Policy. It is the policy of the State of Oregon
that:
(1) The state, in partnership with the private sector, move
toward providing affordable access to basic health care services
for Oregon's low-income, uninsured children and families;
(2) Subject to funds available, the state provide subsidies to
low-income Oregonians, using federal and state resources, to make
health care services affordable to Oregon's low-income, uninsured
children and families and that those subsidies should encourage
the shared responsibility of employers and individuals in a
public-private partnership;
(3) The respective roles and responsibilities of government,
employers, providers, individuals and the health care delivery
system be clearly defined;
(4) All public subsidies be clearly defined and based on an
individual's ability to pay, not exceeding the cost of purchasing
a basic package of health care services, except for those
individuals with the greatest medical needs; and
(5) The health care delivery system encourage the use of
evidence-based health care services, including appropriate
education, early intervention and prevention, and procedures that
are effective and appropriate in producing good health. + }
SECTION 4. { + Increased Access for Uninsured Individuals. In
order to carry out the policy established in section 3 of this
2001 Act, subject to funds available, the State of Oregon shall
increase access to basic health care services provided through
Medicaid, the Children's Health Insurance Program or private
insurance for uninsured Oregonians with an income of up to 185
percent of the federal poverty guidelines. + }
SECTION 5. { + Waiver for Private Insurance Coverage. (1)(a)
In order to make progress toward the goal set forth in section 1
of this 2001 Act, the Department of Human Services shall apply to
the Centers for Medicare and Medicaid Services for waivers to
obtain federal matching dollars for public subsidies for
low-income, working Oregonians for the purpose of making private
health insurance more accessible and affordable.
(b) Prior to the submission of the waiver application, the
department shall comply with ORS 291.375 (1) and (2).
(2) The waiver application shall provide for the establishment
of a basic benchmark health benefit plan or plans, or approved
equivalent, for subsidized employer-sponsored coverage that is
comparable to coverage common in the small employer health
insurance market. Consideration shall be given to the appropriate
inclusion of preventive services for children and innovative
means of ensuring access to such coverage. Options in the
development of the benchmark health benefit plan may include, but
are not limited to, provision of supplemental coverage for
preventive services.
(3) The Insurance Pool Governing Board, in consultation with
the Health Insurance Reform Advisory Committee, shall identify
and recommend to the Waiver Application Steering Committee
created under section 13 of this 2001 Act and the Leadership
Commission on Health Care Costs and Trends created under section
14 of this 2001 Act a basic benchmark health benefit plan or
plans that qualify for a subsidy under the waiver program, taking
into account employer-sponsored health benefit plans currently in
the market.
(4) The waiver application shall be based on a consideration of
various models to maximize subsidies for employer-sponsored
coverage with special attention given to creative means of
increasing dependent coverage under the employer-sponsored health
benefit plans.
(5) The waiver application shall ensure that:
(a) Coverage under the proposed program does not reduce
employer-sponsored coverage presently available; and
(b) The risk distribution of the current population covered by
the state's Medicaid program is not adversely affected.
(6) The waiver application shall strive to minimize
administrative complexities for enrollees, employers, providers,
health insurance plans and public agencies that participate in
the proposed program.
(7) Prior to its submission for legislative review under
subsection (1) of this section, the department shall submit the
waiver application to the Leadership Commission on Health Care
Costs and Trends for review. + }
SECTION 5a. { + Family Health Insurance Assistance Program.
Upon receipt of the waiver, the Insurance Pool Governing Board
shall focus on expanding group coverage provided by the Family
Health Insurance Assistance Program, with the goal of having
available funds equally distributed between providing group
coverage and individual coverage. + }
SECTION 6. { + Levels of Coverage for Medicaid. In the
Medicaid portion of the Oregon Health Plan, the state shall
provide levels of benefit packages of health care services as
described in sections 7 and 8 of this 2001 Act. One level shall
provide a basic benefit package of health care services and be
called 'OHP Standard.' The second level shall provide a benefit
package of health care services for persons with greater medical
needs and be called 'OHP Plus.' + }
SECTION 7. { + Basic Benefit Package. (1) The Health Services
Commission, in consultation with the legislative committees with
oversight of health care issues, shall develop a basic benefit
package of health care services for the Medicaid portion of the
Oregon Health Plan, the cost of which shall be actuarially
equivalent to the minimum level of care mandated by the current
federal Medicaid law.
(2)(a) In addition to the basic benefit package of health care
services developed under subsection (1) of this section, the
commission shall develop and rank in priority order additional
benefit packages of health care services that may be provided to
the extent the Legislative Assembly has provided funds for
additional benefit packages.
(b) When developing the benefit packages of health care
services to be provided, the commission shall consider that those
benefit packages of health care services may be provided through
managed care organizations with contracts to provide services to
enrollees of the Oregon Health Plan as well as commercial
carriers.
(3) The commission shall obtain from an independent actuary the
costs of providing the benefit packages of health care services
identified in subsections (1) and (2) of this section.
(4) The commission shall recommend whether Oregonians receiving
subsidies for OHP Standard be required to pay premiums and
copayments based on the individual's ability to pay and how to
structure the copayments and premiums in a manner that encourages
the use of preventive services.
(5) The commission shall submit its report on benefit packages
for health care services by July 1 of the year preceding each
regular session of the Legislative Assembly to the Governor, the
Speaker of the House of Representatives and the President of the
Senate. + }
SECTION 8. { + Prioritized List. The Health Services
Commission shall continue to develop and report to the
Legislative Assembly the prioritized list of health care services
required in ORS 414.720. The list shall be used to establish the
OHP Plus benefit package of health care services to be provided
to Oregonians who are categorically eligible for medical
assistance as defined by rule by the Department of Human Services
and persons receiving general assistance as defined in ORS
411.010. + }
SECTION 9. { + Written Report of Costs. (1) For the biennium
beginning July 1, 2001, and no later than November 1, 2001, the
Health Services Commission shall prepare and give to the interim
legislative committee with oversight of health care issues, the
chairpersons of the Emergency Board and the Waiver Application
Steering Committee created under section 13 of this 2001 Act a
written report of the costs developed by the actuary under
section 7 of this 2001 Act of a basic benefit package of health
care services and the additional benefit packages of health care
services in priority order.
(2) The Waiver Application Steering Committee shall recommend
the level of benefits to be included in the waiver application
for the OHP Standard benefit package. + }
SECTION 10. { + Funding by Legislative Assembly. (1) The
Legislative Assembly shall determine the health care services
provided under the Medicaid portion of Oregon Health Plan by
funding:
(a) OHP Standard, which shall be the combination of the basic
benefit package of health care services developed in section 7
(1) of this 2001 Act and any additional benefit packages, added
in priority order, from the packages developed under section 7
(2) of this 2001 Act.
(b) OHP Plus, which shall be the benefit package developed in
section 8 of this 2001 Act.
(2) The cost of the benefit package of health care services
provided under OHP Standard may not exceed the cost of the
benefit package of health care services provided under OHP
Plus. + }
SECTION 11. { + Subsidies for Health Insurance Coverage. (1)
Subject to funds available, the waiver program described by
section 5 of this 2001 Act shall provide public subsidies for the
purchase of health insurance coverage provided by public programs
or private insurance, including but not limited to the Family
Health Insurance Assistance Program, for currently uninsured
individuals based on incomes up to 185 percent of the federal
poverty level. The objective is to create a transition from
dependence on public programs to privately financed health
insurance.
(2) Public subsidies shall apply only to the cost of the basic
benchmark health benefit plan or the approved equivalent
established in section 5 of this 2001 Act.
(3) Cost-sharing shall be permitted and structured in such a
manner to encourage appropriate use of preventive care and
avoidance of unnecessary services.
(4) Cost-sharing shall be based on an individual's ability to
pay and may not exceed the cost of purchasing a plan approved as
provided under subsection (2) of this section.
(5) The state may pay a portion of the cost of the subsidy,
based on the individual's income and other resources. + }
SECTION 12. { + Rates. (1) The Department of Human Services
shall recommend to the Seventy-second Legislative Assembly an
alternative method of determining the capitation rate paid to
fully capitated health plans, mental health organizations, dental
organizations and other managed care entities providing services
to enrollees of the Oregon Health Plan.
(2) Rates recommended under subsection (3) of this section
shall:
(a) Be sufficient to provide appropriate access to services
covered by the Oregon Health Plan; and
(b) Ensure that the current health care delivery system of
fully capitated health plans, mental health organizations and
dental care organizations used to deliver health care services to
enrollees of the Oregon Health Plan is maintained and enhanced as
needed to provide appropriate access to covered health care
services for all enrollees of the Oregon Health Plan.
(3) The recommendation regarding the capitation rate shall:
(a) Provide for the rate to be constructed in a manner that
allows providers, patients and policymakers to easily understand
how the rate is developed and the components that are used to
develop the rate;
(b) Use nationally recognized comparators for constructing the
rate including but not limited to:
(A) The Medicare Resource Based Relative Value conversion
factor for physician services;
(B) The Medicare hospital reimbursement principles; and
(C) Medical inflation rates used by the Centers for Medicare
and Medicaid Services;
(c) Seek to equitably reimburse the different providers at
rates necessary to provide appropriate access to services covered
by the Oregon Health Plan; and
(d) Consider reasonable estimates of health care service
utilization based on an actuarially appropriate model for
projecting such utilization. + }
SECTION 13. { + Waiver Application Steering Committee. (1)
The Department of Human Services shall establish a Waiver
Application Steering Committee to assist and advise the
department in the preparation of the application for federal
waivers from the Centers for Medicare and Medicaid Services
necessary to carry out sections 1 to 11 of this 2001 Act. The
committee shall ensure that the concerns and views of Oregonians
interested in the Oregon Health Plan are fully considered in the
preparation of the waiver application.
(2) The committee shall consist of, but not be limited to, the
following:
(a) Two members of the House of Representatives appointed by
the Speaker of the House of Representatives, one of whom shall be
a member of the Emergency Board;
(b) Two members of the Senate appointed by the President of the
Senate, one of whom shall be a member of the Emergency Board;
(c) A representative of a statewide association representing
hospitals and health systems;
(d) A representative of a statewide association representing
physicians licensed under ORS chapter 677 to practice medicine in
this state;
(e) A representative of community-based health plans with
contracts to provide health care services under the Oregon Health
Plan;
(f) A representative of dental care organizations with
contracts to provide health care services under the Oregon Health
Plan;
(g) A representative of commercial carriers;
(h) A representative of safety net clinics;
(i) Advocates for health care consumers and persons without
health insurance;
(j) Advocates for persons with mental illness;
(k) One representative each of small and large businesses;
(L) A representative of insurance agents; and
(m) A representative of organized labor.
(3)(a) When preparing the waiver application, the Department of
Human Services and the Waiver Application Steering Committee
shall carefully consider the connection between the coverage
provided through the state Medicaid program and coverage provided
through private insurance.
(b) The waiver application shall set forth the circumstances
under which persons covered under the waivers may use coverage
provided through the state Medicaid program and when they may use
coverage provided by private insurance. These circumstances shall
ensure that the viability of the community-based health plans
currently with contracts to provide health care services under
the Oregon Health Plan will be maintained.
(c) The department and the committee shall consider the
following factors when setting forth the circumstances described
in paragraph (b) of this subsection:
(A) Personal choice;
(B) The ability of a family to obtain employer-sponsored group
coverage;
(C) The cost to a family to obtain employer-sponsored group
coverage;
(D) The cost to the department to obtain or supplement
employer-sponsored group coverage for a person and the person's
family; and
(E) The medical needs of the person and the person's
family. + }
SECTION 14. { + Leadership Commission on Health Care Costs
and Trends. (1) In order to provide a sound basis for future
consideration of strategies to improve access to an adequate
level of high quality health care at an affordable cost for all
Oregonians, the Leadership Commission on Health Care Costs and
Trends is created, consisting of eight members. The commission
shall consist of:
(a) The President of the Senate or a member of the Senate
designated by the President;
(b) The Speaker of the House of Representatives or a member of
the House of Representatives designated by the Speaker;
(c) Two members of the Senate appointed by the President of the
Senate, one of whom shall be a member of the Emergency Board;
(d) Two members of the House of Representatives appointed by
the Speaker of the House of Representatives, one of whom shall be
a member of the Emergency Board; and
(e) One member each appointed by the minority leadership of the
Senate and the House of Representatives.
(2) The commission shall develop an Oregon Health Care Cost
Index. The index shall categorize health care cost components and
health care trends to inform future policymakers about potential
implications of trends in health care programs provided by public
and private programs.
(3) The commission shall review the health care cost trends
that are reducing the affordability and availability of private
coverage and thereby increasing dependence on publicly funded
health care services.
(4) The commission shall monitor developments of possible
federal health benefit tax credit programs and determine ways to
maximize opportunities to expand health insurance coverage
through a state income tax credit.
(5) The commission may contract with a private entity to
develop the index.
(6) The commission shall recommend to the Seventy-second
Legislative Assembly methods to:
(a) Update and distribute the index annually; and
(b) Report to policymakers and the public on potential
implications for health care coverage available in Oregon.
(7) Except as provided in this section, the commission is
subject to the provisions of ORS 171.605 to 171.635 and has the
authority contained in ORS 171.505 and 171.510.
(8) The President of the Senate and the Speaker of the House of
Representatives shall develop a work plan for the commission.
The work plan shall be filed with the Legislative Administrator.
(9) The Legislative Administrator, in cooperation with the
President of the Senate and the Speaker of the House of
Representatives, shall provide staff necessary to the performance
of the functions of the commission.
(10) Members of the Legislative Assembly who serve on the
commission shall be entitled to an allowance as authorized by ORS
171.072. Claims for expenses incurred in performing functions of
the commission shall be paid out of funds appropriated for that
purpose.
(11) Subject to approval of the Emergency Board, the commission
may accept contributions of funds and assistance from the United
States Government or its agencies, or from any other source,
public or private, and agree to conditions thereon not
inconsistent with the purposes of the commission. All such funds
are to aid in financing the functions of the commission and shall
be deposited in the General Fund of the State Treasury to the
credit of separate accounts for the commission and shall be
disbursed for the purpose for which contributed in the same
manner as funds appropriated for the commission.
(12) Official action taken by the commission shall require the
approval of the majority of the members of the commission. All
legislation recommended by official action of the commission must
indicate that it is introduced at the request of the
commission. Such legislation shall be prepared in time for
presession filing pursuant to ORS 171.130. + }
SECTION 15. { + Benefit Packages for 2001-2003 Biennium. For
the 2001-2003 biennium, the benefit package of health care
services provided to individuals currently receiving services
under the Oregon Health Plan shall be the benefit package funded
by the Seventy-first Legislative Assembly until sections 6 and 11
of this 2001 Act become operative. + }
SECTION 16. { + Operative Date. (1) Sections 6, 10 and 11 of
this 2001 Act become operative the day after the date of receipt
by the Department of Human Services of the necessary waivers from
the Centers for Medicare and Medicaid Services.
(2) The Director of Human Services shall notify the President
of the Senate, the Speaker of the House of Representatives and
the Legislative Counsel upon receipt of the waivers or denial of
the waiver request. + }
SECTION 17. { + Effective Date. This 2001 Act being necessary
for the immediate preservation of the public peace, health and
safety, an emergency is declared to exist, and this 2001 Act
takes effect on its passage. + }
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