Options for Maintaining Consumer Access to Affordable, Comprehensive Health Insurance in Oregon

In 2013, more than 550,000 Oregonians lacked health insurance.[1] By 2017, thanks to the federal Affordable Care Act, that number had fallen by more than half, meaning an additional 320,000 Oregonians had health insurance through an improved individual insurance market and expansion of the Oregon Health Plan. Recent changes by the federal government threaten to undermine this progress by making it harder for Oregonians who purchase insurance in the individual market to continue to do so.

Our new report, A Better Health Insurance Market for Oregon: Options for Oregon to Maintain Consumer Access to Affordable Health Insurance, explores several options for how Oregon might respond to policy changes that threaten to weaken the individual insurance market. The challenge for the state is to stabilize the individual insurance market while also dealing with the underlying problem of high and rising health care costs.

Before the adoption of the Affordable Care Act, people who could not obtain insurance through an employer, a government plan or another group option struggled to buy insurance for themselves. Plans were expensive, offered limited coverage, and may not have been available at all to individuals with pre-existing conditions.

The Affordable Care Act attempted to create a stable insurance market by mandating that all consumers have insurance, requiring insurers to sell insurance to everyone seeking to buy it, and limiting insurers’ ability to charge higher prices to the sickest patients. These measures – and many less visible supporting policies – enabled tens of thousands of previously uninsured or underinsured Oregonians to purchase comprehensive insurance in the individual market.

However, Oregon’s market for individual insurance has been destabilized by a range of forces in recent years. Congress and the Trump administration have enacted policy changes that have increased insurance costs, made it more likely that healthier patients will forego buying comprehensive insurance, and allowed insurers to sell plans with very limited coverage. Coupled with continually rising health care costs and planned policy changes that were built into the Affordable Care Act, these federal policy changes make it more difficult for individual consumers to obtain affordable, comprehensive health insurance coverage.

In the face of these changes, there are a number of policies Oregon could consider to help limit premium increases, maintain enrollment by healthier individuals, and stabilize the individual insurance market so that it remains a valid route for Oregonians to obtain health coverage.

• Adopt a state-level individual insurance mandate. This would require all Oregonians to have health insurance or pay a tax penalty, compelling healthier customers into the market, lowering the average premium, and maintaining a steady level of risk for insurers.
• Explore a “public option,” in which individual consumers would have the option of purchasing insurance coverage through a government-supported health plan, such as the Oregon Health Plan, which is Oregon’s Medicaid program.
• Take steps to limit the impact of health insurance premium increases on consumers who do not qualify for tax credits that offset premium costs.
• Consider changing Oregon’s existing reinsurance program. The state’s current reinsurance program covers a portion of the medical bills of patients who purchased insurance in the individual market and who incur expenses between $95,000 and $1 million. This reduces risk for insurers and enables them to charge lower premiums. It may be possible for Oregon to further limit how much insurers pay on behalf of consumers with especially high medical bills, a change that could help slow insurance rate increases.
• Shift control of Oregon’s online health care market to the state instead of relying on the federal government’s online platform, HealthCare.gov. This could reduce costs for insurers and thus for individuals who purchase their own insurance.

These policies have the potential to help ensure individual consumers’ access to affordable, comprehensive health insurance and allow Oregon to maintain its progress reducing the number of Oregonians who lack insurance.

[1] Oregon’s population was 3,922,908 in 2013, per https://www2.census.gov/programs-surveys/popest/datasets/2010-2018/national/totals/nst-est2018-alldata.csv. 14.5% of Oregonians lacked health insurance, per Oregon Health Authority, 2017 Oregon Health Insurance Survey: Early Release Results, 5 December 2017, archived at https://web.archive.org/web/20190320001244/https://www.oregon.gov/oha/HPA/ANALYTICS/InsuranceData/2017-OHIS-Early-Release-Results.pdf.