Critics Fear Flood of Medicaid Applicants Will Cost State Millions

Tuesday, October 14, 2014

Shelby Sebens, GoLocalPDX Reporter

Photo Credit: donbuciak via Compfight cc

The Oregon Health Authority has more than tripled the number of new Oregonians on Medicaid it expected to enroll under the Affordable Care Act and critics of the program are worried about an eventual blow to the state’s budget.

“The Cover Oregon computer fiasco, I think, is going to pale when we look at the overall coast of what we’re doing and our inability to pay for it,” said state Rep. Jim Thompson, R-Dallas, vice chairman of the House Health Committee. He contends there will not be enough resources to cover the newly insured.

The state had expected to enroll an additional 120,000 Oregonians in the Oregon Health Plan, its low-income Medicaid program, by 2014 but has ushered in about 425,000, according to Oregon Health Authority documents.

“That begs the question of who’s paying for that,” Thompson said.

The Affordable Care Act, also known as Obamacare, is President Barack Obama’s healthcare reform law that took effect one year ago. Part of the law expanded Medicaid and the Oregon Health Authority administers that through the Oregon Health Plan. The other part of the ACA aims to get everyone medical insurance in the private market. Oregon’s rollout of the private insurance program, called Cover Oregon, was rocky and dogged with technical issues from start. The website never enrolled anyone and the debacle has led to a legal fight between the state and the software company contracted to build the site.

State officials argue Medicaid enrollees are just coming on board faster and that the influx can be managed.

“The important thing to remember too is that the people just came in sooner,” OHA’s Transformation Center spokeswoman Alissa Robbins said. “Processes worked even better than planned.”

A 2013 Oregon Health & Science Institute study oft cited by politicians in favor of the Medicaid expansion says the state will actually save $79 million by 2020 through the Medicaid expansion program because the federal government is picking up the lion’s share of the cost. But the early projections are based on far fewer people entering into the state’s Medicaid program.

The study only projects up to 245,000 new enrollees by 2020.

Though exactly how much of an impact this has on OHA’s budget remains to be seen, the talk around the capitol is that the additional enrollees will have an impact.

“I wouldn’t be surprised if they needed to rebalance,” said Mitch Greenlick, D-Portland, chairman of the House Health Committee.

Robbins said that rebalance will mean going back to the legislature to update the budget to include additional federal funds that will pay for the new enrollees. The ACA covers 100 percent of the cost of new enrollees through 2016.

As lawmakers come back to session next year and start working on the 2015-2017 budget, they will have to start thinking about how to pick up part of the cost of those newly enrolled in Medicaid. The feds pick up 100 percent of the cost through 2016 and then the match starts decreasing. By 2020, the state will have to pick up 10 percent of the cost.

The Oregon Legislature and the Governor passed a $15 billion budget for the OHA this biennium, a more than 20 percent increase over the last biennium.

Phasing In

Starting in 2017, Oregon will have to pick up the bill for 10 percent of the newly enrolled. The OHSU study anticipates that will cost $433 million by 2020. But some worry whether it will be more and how the state will cover all the newly insured.

The concern comes on the heels of the disastrous rollout of the Cover Oregon website, which was supposed to go live a year ago but was myriad in controversy and lawsuits. The federal government is taking over Cover Oregon.

“Given Cover Oregon’s track record of missed deadlines and broken promises, it is not surprising to hear that there may be significant cost overruns," Senate Republican Caucus spokesman Michael Gay said. "This is failed leadership at its worst: burdening taxpayers and leaving Oregon families to wonder if they are going to have access the healthcare coverage they need.”

The agency recently inadvertently enrolled U.S. Sen. Jeff Merkley in the low-income Medicaid plan.

“When you go into a plan like this where you know the direction but you don’t know how many people are going to sign up, you don’t know the cost, what do you think is going to happen?” Thompson said.