Rollout or Fallout? Cover Oregon Failure Would Bring Down Many
Cover Oregon is our state’s implementation of the Federal Affordable Care Act (ACA), commonly referred to as Obamacare. Oregon’s proactive development and huge investment in rolling out the ACA in our own way along with other new health care policies has often resulted in our state being heralded as a national leader in health care reform.
Certainly no politician in Oregon has aligned and attached themselves more closely to all of this than Governor John Kitzhaber. Dr. Kitzhaber has been working hard to be just that…the Doctor Governor. Numerous other politicians have put their names next to “health care reform” as well—need we even mention President Obama?
But with Cover Oregon now trailing the rest of the nation in ACA enrollments and with difficulties plaguing the national system, will there be significant fallout in next year’s elections and who will be the target of the blame?
Let’s start with 8 facts about the state of the ACA Rollout:
1) When we say Oregon is trailing the rest of the nation in health care signups through its new insurance exchange, what we really mean is that no one has signed up yet. Cover Oregon has yet to enroll any Oregonians and is likely only accepting paper applications for the rest of 2013, making its website useless for signing people up for coverage that will be starting on January 1st.
2) Oregon has spent over $300 million thus far on its health care exchange. As of October, over $20 million had been spent specifically on advertising the exchange.
3) Some 145,000 Oregonians who currently have individual health plans will lose those plans by the end of next year because they don’t comply with ACA requirements. Originally, these plans had to expire by the end of this year. Now, Oregon’s Insurance Commissioner has allowed insurers to extend health plans through next year, if they choose to. The delay still leaves a lot of uncertainty in the system but makes up for the fact that there is no easy way to sign-up for compliant insurance plans on the exchange right now. The only way to do that is with a paper application that will take weeks at least to process. For those who try, they cannot easily know in advance what subsidies they are eligible for, which means they may end up paying more for the new policies that provide more coverage than they previously had. And all of this is not to mention the promises numerous politicians made—from the President to members of Congress—that current health insurance plans would not change.
4) The President announced last week that these existing health insurance plans can be extended through next year, followed by a similar decision here in Oregon. However, it’s not clear whether health insurance companies can or will keep the plans available for consumers at the same price.
5) There are countless anecdotal reports of people with existing plans that are not being canceled because they meet the ACA’s requirements but are going to become much more expensive starting next year. We were not able to find conclusive data on the number of Americans in this situation though there are many individual cases that are examples.
6) For those of the 145,000 Oregonians who will eventually lose their current insurance but do find new plans on the Cover Oregon exchange, many are discovering the plans cost more. One reason is because there is now less flexibility in what kind of coverage level you can choose. Many younger people are not quick to sign up on the exchanges for fear that their insurance will cost more in order to subsidize older and sicker people—one of the primary purposes of the ACA in the first place. And of course, if younger, healthier people do not sign up on the exchanges the result may be the financial collapse of the entire system.
7) Then there are some of those whose health care plans were cancelled but can afford a new plan on the exchange because of a provided subsidy. Take a couple in Vancouver,Lindsey and Jesse McChesney. Through Washington’s new “Healthplanfinder” (which seems to actually work, unlike Cover Oregon), the couple can find a new plan that is only $30 more per month due to a federal subsidy of $230 each month. The problem is not the cost but rather the shift away from market-based prices on the supposed marketplace. Here’s Lindsey’s take on it: “Before this law goes into effect, I was paying for my health care myself. Now, I have to get help from the federal government to pay for it. So I’m just another person on welfare, basically.” How big of a welfare state are we talking about? “About 55 percent of the Oregonians who must buy insurance from Cover Oregon will be eligible for federal subsidies to help them pay their monthly premiums….” About 17 million people nationwidecould qualify for federal subsidies.
8) Lastly, the economic impact of the new system appears to be significant. A survey of businesses that have 40-500 employees found that “Health care reform already is leading many businesses to cut workers’ hours, hire part-timers or stay below the employer mandate’s 50-employee threshold.” Additionally, “more than 30 percent of franchise businesses have reduced workers’ hours because of the law, which counts anyone working more than 30 hours a week as a full-time employee. The survey found that 12 percent of non-franchise businesses have cut employees’ hours due to the law.”
The List:
Besides those needing insurance, who else does a failure of Cover Oregon hurt?
Now that we’ve looked at the facts about the Cover Oregon and ACA rollout, let’s look at who may be impacted now or on Election Day, 2014:
1) Governor John Kitzhaber: In a previous post about a possible matchup between Kitzhaber and Republican Representative Dennis Richardson in next year’s gubernatorial election, we wrote the following:
While Kitzhaber is popular amongst voters and does not seem to have lost his likability, his last year of governing has not been his best. Representative Richardson’s challenge in this area is to introduce himself to voters and show how his style of leadership will serve them better than Kitzhaber’s.
A continued failure of Cover Oregon may be a significant blow to Dr. Kitzhaber’s reputation because of how much he has personally staked on health care reform.
2) Members of the Oregon Legislature: You can check out the voting records of legislators on Senate Bill 99 (2011), the implementation of Oregon’s Health Insurance Exchange Corporation. Whether Cover Oregon will be a major election issue in legislative elections next year remains to be seen. But many incumbents will not be able to run from this and other votes on their records.
3) Members of Congress: Politicians are now running from Obamacare as if it were on fire. Or at least some members of Congress who are up for reelection next year are distancing themselves from the law and from the President. Two recent examples are Democratic Rep. Kurt Schrader from Oregon’s 5th District who said that Obama was “grossly misleading to the American Public” about the health care law and Democratic Senator Jeff Merkley—who is attracting a lot of Republican challengers after his first term—who surprised many by signing onto a bill modifying the ACA.
4) Government in general: Polling shows that “dissatisfaction with government” has beenthe most important problem facing the country, according to voters, for the last two months—a first since the question was first asked in the 1930s. Furthermore, only 19% of Americans trust the federal government to do the right thing most or all of the time.
5) President Obama: The President is not up for election again but he does face the challenge of pushing his agenda during the rest of his second term. This only becomes more difficult as the health care debacle drags down his presidency. The same polling mentioned above shows he is at the lowest approval rating of his presidency—39%. He is beingespecially lampooned over his endlessly repeated campaign promise that Americans could keep their health care plans and doctors if they so desired. This promise, of course, has since been broken.
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