Oregon Health Plan, Cost of medical care -- Oregon, Health insurance -- Oregon, Health insurance -- Law and legislation -- Oregon, Health care reform -- Oregon
Governor Brown’s health care financing package, which was released with the 2019-21 recommended budget included several revenue components which provide broad-based, sustainable revenue for health care coverage in Oregon for the next six years. One component of that package is the Subsidized Employer Participation Program, which would be similar to the San Francisco Health Care Security Ordinance (HCSO). The new requirement would compel employers of a certain size who otherwise do not qualify for any exemption to contribute to their employees’ health care costs. An employer’s contribution could be in one of three ways: (1) in the form of directly paying for part of their employees’ health insurance, (2) by paying for health care services directly or through a sort of health reimbursement arrangement, or (3) by contributing to the state Health Care Access Fund that further supports access to coverage through the Oregon marketplace or helps fund the Oregon Health Plan. The Oregon Health Authority (OHA) has developed a revenue model to estimate potential state collections based on the size of the mandated contribution. To assist in this, the OHA has requested that the Northwest Economic Research Center (NERC) review their revenue and rate-setting modeling for accuracy and explore additional risks and consequences of the proposed policy.
The OHA model utilizes 2017 Medical Expenditure Panel Survey (MEPS) data to determine the number of employees by firm size and full-time/part-time status, as well as health insurance status. From this data, the model calculates the numbers of employees within three groups: employees at firms not offering coverage, employees at firms offering coverage but who are not eligible for coverage, and employees at firms offering coverage who are eligible but are not covered. The model then assumes per worker hour spending requirements assuming all workers are employed for an average of 34.5 hours per week, to calculate the potential revenue raised.
For the purpose of this analysis, NERC assumes that: 1) New Businesses (startups) would be exempt from the spending requirement in their first year; 2) $120 million annually from the Health Care Access fund would be used to fund the Oregon Health Plan with the remaining revenue being directed to a new program providing marketplace subsidies to employees getting coverage through the Marketplace; and 3) only firms with over 50 employees will be subject to health care spending requirements.
© 2019 Northwest Economic Research Center
Northwest Economic Research Center; Hulseman, Peter; Rovang, Adam; Bales, Devin; and Chun, Nicholas, "Healthcare Spending Mandate Modeling Report" (2019). Northwest Economic Research Center Publications and Reports. 45.