In 299 days – on January 1, 2014 – a major piece of federal health reform will go into effect. Through our health system transformation work, Oregon has been preparing for years for this change. This week in the state House Health Care Committee, lawmakers heard an update on the changes coming in 2014, how Oregon has been getting ready, and proposed legislation to allow final alignment of state laws and practices to ensure a smooth transition. To see a full list of the bills and our presentations, go here and look for "Health Reform, 2014."
To summarize what was discussed this week, the Affordable Care Act is, at its heart, insurance reform. In 2014, individuals and small businesses will have more options for health care coverage than they do today. Projections show that by 2016 up to 95 percent of Oregonians could have health care coverage.
Individual and small-group plans also will have higher standards. Preventive care will be covered in full, and there will be a set of minimum essential benefits all plans will offer. Also, the costs for older and younger people will be evened out to reduce the difference in premiums between people of different ages. Deductibles and out-of-pocket expenses will be capped.
One of the most important changes is that everyone will qualify for health insurance. No one can be denied coverage because of a pre-existing condition. Last year nearly 17,000 Oregonians were rejected when they tried to apply for coverage, according to reports from the state Insurance Division. Those are people like Fellene Gaylord of Portland.
At 58, like many people her age, she has arthritis and high cholesterol. She experienced premium shock when, after searching for two years, she finally found a plan that would accept her. The cost was $1,000 per month – more than her mortgage payment.
Beginning next January, Fellene and the tens of thousands of Oregonians in similar situations will have access to the care they need and there will no longer be a need for the high-risk pool. In Oregon, we have done a good job helping people in similar situations as much as we can with our state's high risk pool offered through the Office of Private Health Partnerships. One of the bills heard this week is HB 2240, which will transition these clients to coverage by Medicaid or private plans offered on Cover Oregon, our state's health insurance exchange.
In 2014 because the new plans have higher standards and everyone will be accepted, it's anticipated that premiums could initially increase. To help offset that cost, tax credits are available through Cover Oregon for anyone earning less than $44,460 ($92,200 for family of four). Most people in the individual market are expected to qualify for tax credits.
In addition, another proposal this week would help mitigate potential increased premium costs for everyone buying coverage on the individual market. We estimate that this, combined with a federal reinsurance pool, could reduce the increase in premiums in the first year by about 15 percent. The Oregon Medical Insurance Pool (OMIP) and its board would create and administer the program, and current OMIP assessments would be redirected to fund it.
I am proud of everything Oregon has done to prepare for this profound change coming to our state. In the 299 days to come I will continue to update you on how OHA is evolving to meet the challenges and opportunities that 2014 will bring and what they mean for the people we serve.