Another Lesson from Oregon: Charging the Poor More For Medicaid Is An Unhealthy Idea
Chuck Sheketoff
I know someone who used to say “I made a mistake once. I thought I had made a mistake, but I hadn’t.”
Oregon’s not so egotistical. Oregon did something stupid, studied what we did, and recently admitted to the world that we made a mistake.
Oregon’s once-landmark Oregon Health Plan in its heyday extended health insurance to over 130,000 poor and low-income Oregonians. Starting a little over a year after it was implemented, the Legislature and the Governor started whittling away at its scope. Today it serves only about 30,000 people who otherwise would not have insurance but for the OHP Medicaid expansion.
One way Oregon policymakers slashed workers and families from the OHP was by instituting, and then increasing, premiums and co-pays. “Cost sharing” is the 1984-ish, sounds-good, policy term legislators and government officials use to describe charging premiums and co-pays to the poor and low-income families who rely on Medicaid for their health insurance.
To its credit, Oregon decided to study the impacts of the increased premiums and co-pays. The result: disaster.
The results of Oregon’s study were recently published in Health Affairs. Six months after the changes were implemented, a survey showed that almost half (44 percent) of the people enrolled in the OHP lost Medicaid coverage. During that same time period, the total number of people enrolled in the OHP declined by 50,000 (46 percent).
Why did people lose OHP coverage? About half (44 percent) said they lost insurance because of difficulties paying the increased premiums and/or co-payments. Not surprisingly, those who had those problems were poorer than those who left for other reasons. As noted by the authors in the Health Affairs article, “Increased cost sharing disproportionately affected the most economical vulnerable OHP members.”
What happened to those who lost coverage? More than 80 percent of those who lost coverage due to the increases in premiums and/or co-pays had not found alternative forms of insurance, and remained uninsured, six months after the premiums and co-pay changes took effect.
The lesson from Oregon is clear: increasing premiums and co-pays for the families and individuals who rely on Medicaid is unhealthy public policy.
Will Oregon’s U.S. Senators Gordon Smith and Ron Wyden protect against further efforts (such as those promoted by the National Governors Association) to shift more of the cost of Medicaid onto the low-income families and individuals the program serves?
Time will tell whether Senators Smith and Wyden and their colleagues will heed the lesson from Oregon.
Tell Senator Smith and Senator Wyden what you think.
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Jul 29, '05
I hope that Senator Smith understands the stakes involved here and will really go to bat for Oregonians.
I worry that he's "made his stand" and that he's going to go along with these big, big cuts.
It is hard, for those of us who have trusted him, to watch whether or not he follows through when it matters most.
It seems like he wants credit for standing up for what is right, as long as he never actually has to confront President Bush and actually deliver on issues "he is for." It is almost as if he says what's right when it doesn't matter, and cowers in the face of right-wing pressure when it matters most.
8:46 a.m.
Jul 29, '05
It just doesn't pay to be poor any more. The problems you describe are endemic to low-wage earners. Policies tend to look through a single lens at their situation, making a virtue out of blindness.
Example: we encourage people to take on debt for education, knowing that an educated populace benefits the country. But then we fail to consider the effect of debt on paychecks. After completing college, you may earn a decent paycheck, but hundreds of dollars go to pay off the debt. Your real wealth is still subsistence level, but due to your salary, you're not eligible for programs like OHP (even in its pre-slashed incarnation). And on and on it goes.
For the GOP, this makes beautiful sense. The Norquistas can blandly call for cutting a single policy, which will earn them support and votes: why not; they're constituency isn't the chronically poor.
But where are the Dems? This is a two-America America, and the Dems have failed to fight for the losing America. Over the course of a generation, we've stacked the deck against a large minority of the population. It's no wonder the poor can't climb our of poverty. And until Dems re-assert that commitment, more and more will slide into economic struggles.
Great post, Chuck.
Jul 29, '05
Honest, straightforward statistical analysis can be a thing of beauty. Good work, Chuck.
The Oregon Health Plan worked because John Kitzhaber refused to let it fail. Both in Oregon and nationally, we lack the commitment to provide decent healthcare to those not economically well off. Hell, we lack the commitment to an effective, efficient healthcare system for those who can afford it.
Jul 29, '05
Copayments are the problem?...from what I understand there are no copayments for children on the OHP, and for adults its less than $10. And thats only for the "plus" plan...there is NO COPAYMENT for the standard plan for anyone. And the dental copayment is only $3. I dont have insurance because I work on contract. But when I did have coverage, my copayments were $25, and my dental coverage only covered 80%, the "copay" was the remaining 20% (if it covered the procedure at all). I think maybe the people on the OHP need to realize they still are getting a deal, copay or not.
And if they say they really cannot afford a copayment, lets make sure they are not spending money on cigarettes, cable tv, alcohol, etc.
I think the problem is they werent getting a free ride anymore.
here is where I got my info:
http://www.dhs.state.or.us/healthplan/data_pubs/faqs/faqclientcopay.html#1
Jul 31, '05
Jon,
Over the last few years the state legislature has been constantly changing the Oregon Health Plan, making it ever more complicated and hard to follow. During their last session they split it into two programs, in order to make it easier to cut benefits and enrollment.
OHP-Plus is traditional Medicaid for low-income people -- elderly, disabled, etc. -- whom the state is federally mandated to cover. By virtue of being 65 and very low income (Social Security), I'm covered by both Medicare and OHP-Plus.
OHP-Standard is for low-income adults whom the state is not federally mandated to cover. The main problem with that is that the state has required premiums for that program which the poorest people on it cannot pay, and kicked people off it for six months if they got behind on payments, so that enrollment has been drastically cut. When I was on it my monthly premium was $18, which I could afford to pay, but for someone who has little or no money that is prohibitive. I know that must be hard for you to understand. These people live at a different financial scale than you do, where even small amounts of money are hard to come by. OHP-Standard is now so underfunded that all new enrollment is frozen, so if you get kicked off for slow payment of premiums you can't get back on. Enrollment is now down to about 26,000, and the state is shooting for 24,000. The program has basically been wrecked.
Last I heard, the benefit package for OHP-Standard does not include dental or vision, and provides only emergency hospitalization. The legislature keeps cutting benefits, adding some back, cutting benefits again, so that anyone on the program is very insecure regarding access to medical care. Also, many doctors will not accept OHP-Standard clients because of the low payments to providers.
Meanwhile the state legislature keeps shoveling out the business tax breaks, a form of welfare for those who don't need it.
As for your comment that "if they say they really cannot afford a copayment, lets make sure they are not spending money on cigarettes, cable tv, alcohol, etc.," I don't believe that poor people are any more reckless in their spending, probably less so, than people who have more money. You are just stating a prejudice. I would like to see you live poor for a while and see how you handle it. There are skills involved.
Aug 3, '05
First, thanks to Chuck for the great write up. I am one of the authors of the study, and appreciate the attention it's been getting here and in other media. Nice to see these issues being discussed.
To further clarify some of Jon's points, and follow up on Lynn's: There are currently no copays for OHP Standard, as the result of a legal decision in the Summer of 2004. However, at the time this stage of our research was done, there were indeed copays for Standard, and they ranged from $10 for an office visit to $50 for an ED visit to $250 for a hospital visit. And OHP Standard does not include dental or vision.
What we found was that a combination of cost sharing increases --higher copays, higher premiums, the elimination of premium exemptions for people with no income, and a mandatory six month lockout from coverage for not paying a premium -- caused a lot of people to leave OHP, especially those in the "zero income" category. And we found that even for those who do stay on OHP, the increased copays actually did reduce doctor visits and cause people to skip their medications.
Even leaving aside the humanitarian perspective for a moment, this is major trouble from a policy standpoint. Most of these folks are much sicker than the general population, with a variety of chronic illnesses like diabetes that are very sensitive to ambulatory care. When they don't get good primary care or take their medications they end up in the hospital ED, which is the most expensive possible way to treat people. And indeed, we found that people who left OHP because they could not afford the cost sharing increases did use more ED care. The costs for this really expensive, uncompensated ED care must be absorbed by the hospitals, and ultimately get passed on to the average consumer.
So even if you do think people ought to realize what a good deal they're getting, the fact is that the policy caused them to leave. And the outcome is the same regardless.
Anyway, thanks to all of you for your interest in this work. For those who are really interested, this is an ongoing study, and the Commonwealth Fund just released a report we wrote that details the situation one year after the results Chuck summarized here. You can find it at: http://www.cmwf.org/
--Bill
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