Medicaid-expansion price tag looms
SALEM — Amid the embarrassing collapse of Cover Oregon, the state's failed health insurance enrollment website, then-Gov. John Kitzhaber and lawmakers found solace in an unrelated success — a massive hike in enrollment in the Oregon Health Plan.
The Health Plan is Oregon's Medicaid program, and as hundreds of thousands of people became newly eligible last year under President Barack Obama's health care law, most of them signed up. In the first year, enrollment was 73 percent higher than anticipated, according to data from the Oregon Health Authority.
The bill will be soon be coming due, however, as the state begins sharing the costs. The Affordable Care Act said the federal government would cover 100 percent of medical costs only until 2017, when its share would begin dropping to 90 percent.
A 2013 report commissioned by the state projected that 222,700 people would take advantage of the expanded Medicaid access in its first year, 2014. The final tally was much higher: 386,000 people.
The increase was likely due in part to a simplified "fast track" enrollment process that federal officials approved for Oregon, though several other states also saw enrollment exceed expectations. Oregon got permission to use income information already on file through other public assistance programs, providing a quick and easy way for many eligible people to sign up. And as Cover Oregon failed to work, the Kitzhaber administration aggressively promoted the fast-track option. The administration hoped to boost Medicaid enrollment numbers to make up for the paltry enrollment in private insurance through Cover Oregon.
The 2013 report estimated that the Medicaid expansion would cost the state $217 million in the 2017-2019 biennium, the first full two-year budget cycle in which the state begins shouldering some of the costs.
The Oregon Health Authority now projects it will cost $369 million, about 70 percent more.
By 2020, Medicaid's share of the total state budget is projected to grow from the current 6.2 percent to nearly 10 percent.
The figures assume the federal government doesn't change the state's share of the price tag and that Oregon doesn't take other actions to reduce the cost of Medicaid, such as reducing payments to doctors.
HOW TO PAY
Oregon gets a big chunk of Medicaid funding from a tax on hospitals. The tax is matched by federal dollars, some of which ultimately flows back to hospitals for treating Medicaid patients. Increasing the tax could help cover part of the budget shortfall, said Sen. Richard Devlin, D-Tualatin, co-chair of the Legislature's budget committee.
Ultimately, Devlin said, Oregon needs the improving economy to get more people off the Medicaid rolls.