Obamacare catastrophe and Cover Oregon controversy continue

Sen Doug Whitsett

by Sen. Doug Whitsett

Many of us predicted the passage of the federal Patient Protection and Affordable Care Act in 2010 would cause harmful consequences to citizens throughout the country. Those initial concerns have proven to be prophetic during the six years since Obamacare was signed into law.

Obamacare was passed on party-line votes by Democrats in both the U.S. House of Representatives and the U.S. Senate. Republicans in both chambers opposed the new law.

Then-House Speaker Nancy Pelosi (D-California) famously stated that “we have to pass the bill so that you can find out what is in it.” Most veteran lawmakers should have found that remark beyond offensive. Like many others, I make it a point to read and try to understand each piece of legislation before I cast a vote either in committee or on the floor of the Oregon Senate. Voters should expect no less from their elected representatives, regardless of party affiliation.

Disgraced former governor John Kitzhaber, along with many other Democratic leaders in Oregon, was determined to make this state the poster child for health care reform. Part of that effort involved the creation of the Oregon Health Authority (OHA) during the 2009 regular session.

Through the passage of House Bill 2009, the OHA was spun off from the Department of Human Services (DHS) largely for the sake of implementing the reforms promised under the federal legislation. Although HB 2009 was not a strictly partisan effort, I voted no due to many concerns, including cost and efficacy.

The combined budgets of the two agencies has increased more than 130 percent during the six years since that ill-advised division into two agencies. The expense of implementing Obamacare has been the greatest cost driver in that budget-busting expansion, despite the constant assurances of “free health care” proclaimed by its proponents.

My concern regarding how the top-down federal legislation would ultimately leave consumers with fewer and more expensive choices for their health care providers has unfortunately come to pass. The consequences of Obamacare are starting to hit really close to home.

An insurance agent who serves the northern part of our large, rural Senate District recently informed my office that multiple providers are discontinuing service to the area. After several phone calls to other area insurance agents confirmed what we were told, I scheduled yet another meeting with state’s Insurance Commissioner and the Director of the Department of Consumer and Business Services (DCBS) to express my concerns and learn more about the problems.

The Director and Commissioner informed me there are now 500 counties in the United States served by only one insurance carrier. The numbers for Oregon and its counties were only marginally better. Several large health insurance carriers are either leaving Oregon or are dramatically curtailing their areas of service and health plan portfolios.

We were informed that one company, LifeWise, will discontinue offering plans in Oregon starting next year. Moda will no longer service customers in 23 counties, including three of the five counties I represent in the Legislature. Pacific Source is pulling out of 30 counties and Providence will no longer be servicing 17 counties.

This is very bad news for many of the state’s 36 counties. According to the Commissioner, under current plans, only eight counties will have more than five health insurance providers. The number of insurance providers falls precipitously outside of those more populous counties.

We were told that as many as 28 counties will have four or fewer health providers. Approximately 14 of those will have only three, including the more populous Jackson, Lane and Deschutes counties. Nine counties currently have only two identified exchange insurance providers.

The more rural district I represent in the Senate includes all or parts of five counties, including Jackson and Deschutes. Four will have three providers and Lake County will have only two.

I was assured by the Insurance Commissioner and DCBS Director that the number of remaining providers will be adequate for preserving competition. However, I remain skeptical because virtually all remaining exchange insurance providers intend to ask for double-digit insurance premium increases and one is requesting increases greater than 30 percent.

Health insurance is currently being provided by two other companies that are not on the state insurance exchange. It is my understanding that those companies and their clients are prohibited from accessing and taking advantage of the Obamacare tax breaks and incentives.

Oregon also spent over $300 million on a website for our state health insurance exchange. That website never worked or signed-up a single person for private insurance coverage. The state and software giant Oracle continue an expensive court battle over who was at fault for the failure. Oregon taxpayers are footing the State’s legal bills.

Last week, Republican members of the U.S. House Committee on Oversight and Government Reform called for a criminal investigation into the Cover Oregon debacle. Not surprisingly, they want to know what happened to their $305 million.

What the public is not being told in those discussions is Oregon was not required to build a website from scratch. In December 2012, my chief of staff wrote an article for the Estacada News in which former state Rep. Patrick Sheehan grilled state officials regarding that decision. Those officials appeared to respond they were not too worried about spending other peoples’ money and could simply ask the federal government for more if they ran out.

Sheehan, who has a background in website development, had received live, real-time demonstrations from a company alleging it could have licensed existing software to the state for $6 million and customized the software to fit the State’s needs for another $6 million. We will never know whether that $12 million investment could have successfully replaced the Cover Oregon tech project. The private sector alternative would have cost only about four percent of what the state eventually wasted building its ill-advised website debacle.

Instead, we became a national laughingstock for wasting $300 million to build a website that was never used to sign-up private sector insurance. Worse, when more than 12,000 insurance applications could not be serviced by the website, the state was forced to hire 400 employees to process paper applications by hand. Compensation for the replacement “low-tech” employees was paid by taxpayers.

The controversy surrounding Cover Oregon has yet to subside. While it is true there are now fewer Oregonians without health insurance coverage than before the health care reforms were enacted, the State’s private insurance market place appears to remain in disarray. Most of the new insurance coverage is due to the expansion of the State’s Medicaid program through the Oregon Health Plan.

The federal government has thus far picked up the tab for paying the premiums on all those new Medicaid participants. However, beginning next year, the federal government will be lowering its contribution towards covering those costs. The state’s obligation to pay for its share of the greatly expanded Medicaid population may soon be as much as $1 billion per budget cycle.

Similarly, the decision to create the OHA will continue to have severe ramifications for the rest of the state’s budget. All-funds combined spending for OHA and DHS has ballooned to more than $28 billion. No end appears to be in sight for that near exponential spending growth that reduces available funding for public safety and education.

In short, federal health care reform has become every bit the disaster that many of us predicted it would be. Our well-founded cynicism was based on our fiscal concerns that further government disruption of the insurance marketplace would result in the restricted availability of medical services and significantly higher costs. Those concerns were met and overridden by derision and allegations that we didn’t want our State’s most needy to have health insurance coverage.

Many of the events we predicted would occur have come to pass. Some are even worse than I had initially imagined.

Access to medical care is rapidly becoming more difficult. Many care providers are reluctant to service Medicaid patients due to cost and reimbursement constraints. Government regulators are reducing payments for available diagnostic and treatment procedures. Patient wait times and frustration are escalating.

Oregonians are already experiencing fewer choices when it comes to health care. Those choices will be even more unaffordable for those who pay for their own health care insurance. This reality is especially true for people living in rural areas.

All things tend to become much clearer with the benefit of hindsight. Perhaps all of this could have been prevented had federal legislators, on both sides of the aisle, actually read the Affordable Care Act and attempted to understand its ramifications and potential unintended consequences. Unfortunately, we are left to deal with the Obamacare catastrophe.

Senator Doug Whitsett is the Republican state senator representing Senate District 28 – Klamath Falls

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Posted by at 05:00 | Posted in Cover Oregon, Health Care Reform, Obamacare | 5 Comments |Email This Post Email This Post |Print This Post Print This Post

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