Oregon has led the way in the creation of a health insurance exchange to help consumers and small businesses purchase health insurance in a transparent method based on comparisons of cost and quality.
The Oregon Business Plan advocated for such an exchange long before federal health care was being considered in Congress. The legislature is expected to continue development of the Exchange via legislation this month in Salem. The exchange will be operational in 2014 for individuals and employers with fifty or fewer employees. There are plans to expand that to employers with one hundred or fewer employees down the road.
Gene Mechanic, a Portland labor, employment and health law attorney, opined in today’s Oregonian that even larger employers (100+ employees) should also be able to purchase healthcare for their employees through the exchange. What do you think?
From The Oregonian February 6, 2012
Gov. John Kitzhaber and the 2011 Legislature deserve credit for moving swiftly to implement the federal health reform law by creating the Oregon Health Insurance Exchange. Starting Jan. 1, 2014, the exchange will be a central marketplace for individuals and employers with 50 or fewer employees to purchase private health insurance plans. In 2016, employers with as many as 100 employees may participate. But to achieve the exchange’s legislatively mandated mission of “increasing the quality, reliability and availability of health insurance for all Oregonians and lowering or containing the cost of health insurance,” the Legislature should expand the exchange’s consumer base by allowing for the participation of Oregonians who are covered by plans sponsored by employers with more than 100 employees.
There’s a myth that large employers are already able to negotiate affordable health insurance for their employees. The National Business Group on Health, which represents large companies such as Nike, Intel, Boeing and Microsoft, estimates that its members had a 9 percent increase in health plan premiums in 2011. The Kaiser Family Foundation found that annual premiums for families with employer-sponsored insurance doubled from $5,736 in 1999 to $13,375 in 2009.
Employees are being forced to pick up a significant portion of those increases while their wages remain stagnant because employers are also paying more for health insurance, leaving less money for wages.
In the February legislative session, lawmakers will consider legislation to adopt a business plan for the exchange. That legislation should allow for large employer participation by 2017, an option provided by the federal reform law, and also authorize the exchange to seek a federal waiver for earlier large employer participation.
Bringing the employees of large employers into the exchange’s marketplace would give it consumer mass market leverage to force insurers to lower the cost and enhance the quality of health plans and, in turn, place pressure on health care providers to find more cost-efficient ways to provide health care.
Setting the stage now for the larger groups will give the exchange sufficient time to establish its operation and plan for more consumers. It will also provide large employers and the unions that represent their employees an incentive to play a role in the development of the exchange and adequate time to evaluate the exchange as an option and plan for transitioning from their current health insurance.
The exchange alone cannot drive down health care costs. But together with Oregon’s 2011 law establishing medical care teams to provide coordinated care on fixed budgets for Medicaid patients and other state health reforms, the exchange can substantially reduce the financial burden of health care on low- and middle-income workers and make more employer funds available for wages.
Large employers may opt to maintain their current plans rather than purchase health plans through the exchange. But given the exchange’s consumer-oriented mission and potential power to negotiate lower premiums, they are likely to be drawn to it.
Even if the U.S. Supreme Court declares aspects of the federal reform law unconstitutional, the Oregon Health Insurance Exchange will likely stay on track. For that track to lead to meaningful health insurance reform, the Legislature must expand the exchange’s consumer base.