Kitzhaber: Oregon Health Plan changes covered more people, shaved growth in cost
Former Gov. John Kitzhaber says Oregon has shown, under a plan he crafted while in office, that it can provide medical care to more people and also slow the growth of costs.
Kitzhaber says the national political parties could draw lessons from Oregon's five-year experiment under Medicaid with 16 coordinated-care organizations delivering services around the state.
Kitzhaber spoke Monday (May 15) at a Washington County Public Affairs Forum luncheon in Beaverton.
Oregon's enrollment of lower-income people has swelled to about 1 million, but annual growth in costs has dropped by 2 percentage points.
"There is a lot to learn here," Kitzhaber said.
"It is my hope that we can inform the national debate so that what we end up with is not simply a partisan and ideological debate about who should get a public subsidy.
"It's about whether we can get every individual in this nation access to high-quality affordable health care, so we ensure a more productive workforce and free people from the fear of the next medical bill."
Kitzhaber plans to talk more about national developments during a forum-sponsored event at 6 p.m. May 24 at the Beaverton City Library, 12375 SW 5th St.
He appeared Jan. 6 at health-care forums in Portland — where he shared the stage with former Maryland Gov. Martin O'Malley, a fellow Democrat — and in Salem. They follow a period of seclusion after his resignation under pressure in February 2015.
"Everybody is affected by the cost of medical care, but it's not just about the cost of care," Kitzhaber said after his talk. "If you look at the Oregon budget, the cost of medical care is one of the things squeezing out paying public employees better or investing more in education."
How the effort started
When Kitzhaber returned to the governorship in 2011 after an eight-year hiatus, Oregon faced a two-year budget gap of $3 billion between projected income and spending.
At the same time, enrollment surged in the Oregon Health Plan, Oregon's version of the joint federal-state program known as Medicaid. For every dollar the state puts up, the federal match is about $2.
In 2012, after state lawmakers approved a new system of delivering care, Kitzhaber proposed a five-year plan — with much of the $1.9 billion in extra federal aid coming in the first two years — aimed at restraining annual growth in Medicaid costs through coordinated-care organizations.
The plan required a waiver from the Centers for Medicare & Medicaid Services (CMS) and was granted while Democrat Barack Obama was president.
"In the middle of a recession, with a $3 billion shortfall, we were able to create a model of delivery that is growing slower than the rate of state revenue," he said.
Kitzhaber said those costs have moderated from 5.4 to 3.4 percent annually — a full 2 percentage points — and have resulted in savings of $1.7 billion after the federal aid was paid off. For the decade ending in 2022, Kitzhaber said, the projected savings are $8.6 billion.
During that time, the number of Oregon Health Plan recipients has swelled from 400,000 to 1 million — one in every four Oregonians — largely because Oregon was among the 31 states to expand Medicaid enrollments as part of Obama's signature health-care law, known as the Affordable Care Act.
Under the 2010 law, which passed with no Republican votes, Medicaid eligibility was expanded from 100 to 133 percent of the federal poverty level starting in January 2014. (For a household of three in 2017, 100 percent of that level is $20,420.)
When Kitzhaber resigned, 95 percent of all Oregonians reported health insurance coverage.
Oregon's waiver was renewed a week before Republican Donald Trump became president, but without the $1.25 billion the state requested in federal money.
Oregon and other states also will have to pay more as the federal share for expanded Medicaid recipients drops.
Cost of care is key
If Oregon's savings from Medicaid were applied to all states, Kitzhaber said total national savings would be close to $600 billion over 10 years, compared with the $800 billion that House Republicans propose to cut from Medicaid in the bill (HR 1628) they passed May 4 with no Democrats in favor of it. Senators from both parties say they have their own ideas for legislation.
Kitzhaber said both the 2010 law and the 2017 bill miss the point that should be dealt with.
"The real problem with the health care system today is not making insurance more affordable, it's making health care more affordable," he said.
"That is where I think the federal debate has gone off the rails. Both are trying to figure out how to help people pay for something that is unaffordable."
The original Oregon Health Plan — which Kitzhaber was chief author of while he was president of the Oregon Senate and an emergency-room physician back in the 1980s — covered all Oregonians under the federal poverty level with basic services ranked by medical effectiveness.
"If we don't have all the money in the world, we need to make some distinctions about what we do and don't pay for," Kitzhaber said.
The plan took effect in February 1994, a few months before his first election as governor.