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What does Medicaid Expansion mean to Oregon

Last week the Senate and House voted, primarily along party lines, to start the process to repeal the Affordable Care Act. The bill, H.R. 3762, named the Restoring Americans’ Healthcare Freedom Reconciliation Act of 2015. This is based on the same bill sponsored by Health and Human Services nominee Rep. Tom Price (R-Georgia) that was vetoed by President Obama on January 8, 2016. With these two votes there have been multiple questions regarding the impact on insurance rates, costs, and premiums.

The Congressional Budget Office was asked by multiple ranking members of the Senate to prepare a document that was released January 2017 titled How Repealing Portions of the Affordable Care Act Would Affect Health Insurance Coverage and Premiums The CBO produces independent analyses of budgetary and economic issues to support the Congressional budget process. This report outlines the estimated changes to the Medicaid expansion, effects on insurance coverage, effects on premiums, and participation of insurers.

A provision of H.R. 3762 is the repeal of the Medicaid Expansion. The ACA allowed for states to increase the eligibility of Medicaid to cover all adults 18 to 65 with incomes up to 133% of the federal poverty level, regardless of their age, family status, or health. In Oregon alone, this amounted to an additional 400,000 members. The number of adult Medicaid expansion beneficiaries as of November 2016 is 366,441 This number amounts to approximately 37% of the total Medicaid population which is currently 980,907.

The majority of the Oregon Medicaid recipients are managed by Coordinated Care Organizations with the remaining recipients fee-for-service managed by the state. There are 16 CCOs in Oregon that manage a portion of the state as seen in this map. The number of Medicaid beneficiaries in each CCO is ranges from approximately 10,000 to 205,000 and in different regions creating 16 unique CCOs. Oregon is also unique in offering adult dental benefits to Medicaid members. These CCOs are provided with a global budget based on an actuary risk model of per member per month capitation. CCOs are also expected to “bend the cost” curve and growth is capped at 3.4% a year.

With a focus on prevention and population health, Oregon CCOs have been creating innovative projects that have the potential to lower future costs of care. These are through coordination with other agencies and programs in their communities such as school-based health centers, teaming with Meals on Wheels, funding community health workers in clinics, adaptive cycling classes, and others.

The effect of H.R. 3762, specific to Medicaid, includes the repeal of ACA Medicaid expansion roughly 2 years after the bill is enacted. In Oregon, this would amount to over 366,000 uninsured with recent enrollment numbers. These individuals would not only lose their medical benefits, but also their behavioral health and oral health benefits. In addition, the CCOs would lose the funding as the per member per month capitation and these community programs might not be able to continue.

The ACA repeal bill is still in the early stages and needs to go through the policy committees on the House and Senate side. It is expected that it will go through the House Energy and Commerce Committee which has a subcommittee on Health. This committee is chaired by Greg Walden (R-Oregon). In Rep. Walden’s district there are almost 55,000 individuals who are insured through the Medicaid expansion in 6 CCOs.

Oregon CCOs have successfully reduced emergency room and hospital utilization by encouraging the growth of the Patient-Centered Primary Care Home which has been shown in a recent study, to reduce total costs of care, especially in the Medicaid population. CCOs are also expected to meet other health metrics including PCPCH assignment, health outcomes, and integration efforts. This has been summarized in a recent report for the Oregon Legislature.

The coordinated care organization model of care adopted in Oregon has increased community involvement through innovative projects, increased health insurance rates, decreased costs of care, and improved health for thousands of Oregonians. This has been achieved through a global budget with a cap on cost growths. If the ACA repeal comes to fruition without a replacement plan, not only would many Oregonians lose their health insurance through Medicaid, but communities may also lose the benefit of the programs designed to improve population health.

Posted on January 17, 2017.