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Legislation restricting health plan up for vote.

Byline: David Steves The Register-Guard

SALEM - A House panel approved a far-reaching rewrite of the Oregon Health Plan that will preserve medical coverage for the 350,000 low-income Oregonians who qualify for Medicaid - but ends coverage for an additional 150,000 people currently on the state plan.

The proposal, slated for a vote by the full House on Thursday, saves about $150 million by restricting coverage and efficiencies meant to mirror the types of limitations imposed by most employer-provided commercial health insurance plans.

"It looks like the insurance you and I buy every day," said Rep. Alan Bates, an Ashland Democrat and one of three key architects of the plan.

When it was launched a decade ago, the Oregon Health Plan represented a pioneering attempt to extend medical coverage to hundreds of thousands of uninsured working poor people, as well as to give more comprehensive coverage to those who received the federally funded Medicaid coverage.

But some of the original elements, such as a requirement that all employers provide insurance to their workers, never materialized. And the plan was destabilized by runaway medical costs, discontent among insurance companies, and hospitals that said they were losing money because of low reimbursement rates.

Beset by such problems, the plan was deemed vulnerable to collapse when the current economic recession began to force deep cuts in state spending.

That left the 2003 Legislature struggling to find ways to maintain the Oregon Health Plan - or simply revert to the traditional Medicaid-style coverage that predated the plan.

Rep. Jeff Kruse, R-Sutherlin, worked with Bates and Rep. Ben Westlund, R-Bend, to craft House Bill 3624, which passed Tuesday in the House Audit and Human Services Budget Reform Committee.

Kruse, who tangled with former Gov. John Kitzhaber, a Democrat who conceived and championed the Oregon Health Plan, said it was a matter of semantics whether this latest version could still be called the Oregon Health Plan, or should be instead considered a successor that maintains Medicaid coverage.

"If people want to call it the Oregon Health Plan, that's fine. A name is a name," Kruse said. "What we have done is redesign the system by which we deliver care to our Medicaid-eligible population."

Medicaid money is provided from the federal government to match state spending to provide health care to poverty-level women and children, elderly, blind and disabled people. And it covers only hospitalization, doctor visits and emergency ambulance service.

The bill sent to the House floor covers just the 350,000 Oregonians who fit these Medicaid categories. It would continue to provide additional services beyond those required by Medicaid, also continuing to pay for drug coverage and durable medical equipment, for instance.

The bill would maintain coverage through about $150 million in savings, which result primarily from:

Reducing the number of medical conditions that would be covered from 549 to 519 - which requires federal approval. Among the 30 medical treatments no longer paid by the Oregon Health Plan would be care for uncomplicated hernias, injections for osteoarthritis and treatment of corns and callouses.

Moving nearly all Oregon Health Plan patients to HMO-style managed care plans. Currently about 30,000 of the 350,000 Medicaid patients on the plan receive traditional fee-for-service care, which costs about 8 percent more.

Establishing a "pharmacy benefit manager system" within state government to oversee prescription drug spending.

Imposing coverage restrictions and safeguards meant to bring Oregon Health Plan coverage in line with the type of coverage provided through commercial plans.

A patient who is diagnosed with a common cold would not be able to receive state-funded treatment for that condition, for instance.

Requiring the Department of Human Services to ensure that only Oregon residents who are financially eligible receive Oregon Health Plan coverage.

Lobbyists for hospitals, medical doctors, pharmacy and drug-manufacturing groups and other players in health-related fields with a stake in the Oregon Health Plan gave no indications they would oppose the plan at Tuesday's public hearing.

However, many said they had problems with specific elements, which they hope to have changed when the bill goes to the Senate.

The Oregon Association of Hospitals and Health Systems' lobbyist, Bruce Bishop, spoke out against the bill's removal of language in state law that calls for the Oregon Health Plan to reimburse providers at a rate adequate to cover costs.

Under the Legislature's new proposals, hospitals and other providers would simply be legally required to cover Medicaid-eligible patients, even if reimbursement rates cause them to lose money as a result.

Bates, a medical doctor, said he expected the bill to be only "tweaked" to address such concerns in the Senate, and that it would be approved by Gov. Ted Kulongoski.

However, he said the Legislature's work to overhaul the public health care system would be far from over.

He said lawmakers now must find a way to ensure that adequate coverage is provided for the mental health needs of the Oregon Health Plan population and to cover the $250 million cost of continuing care for the 150,000 lower-income people on the "Oregon Health Plan Standard" plan - a slimmed down version that will be phased out in six months unless the Legislature comes up with more money.

In addition, the Legislature is seeking to continue funding for a program called the "Family Health Insurance Assistance Program," or FHIAP. It subsidizes lower-income workers to help them buy health insurance through their employers or directly from insurance companies.
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Title Annotation:A panel sends the bill, which would maintain Medicaid coverage, to the House; Legislature
Publication:The Register-Guard (Eugene, OR)
Geographic Code:1U9OR
Date:May 14, 2003
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