The “Why Not Portland?” Initiative and Its Pricey Goals

By Brian Campbell

“Why Not Portland?” This is the question raised by supporters of a health insurance initiative for the roughly 9,000 uninsured students in Portland public schools. Proponents of the initiative plan to use taxpayers’ money to make basic healthcare available to children whose family incomes are too high to qualify for the Oregon Health Plan, but too low to afford health insurance. The pro-gram would cost the City of Portland and the school districts serving Portland an estimated 4.05 million dollars annually.

If included and passed in the November 4th municipal general election, this ordinance would do little to help the uninsured except for those with the most costly of medical conditions. Check-ups would carry a reasonable $10 co-pay, but problems would arise if any serious care was needed. Medicine, hospitalization, diagnostic and specialist care would require a $7,500 annual deductible. It is puzzling that the deductible is so high. In 2006, the average annual deductible per privately insured family member was $710, which is higher than the yearly medical expenses for many children.

The majority of uninsured Americans have incomes less than twice the federal poverty level. For a family of four making double the federal poverty level, a deductible of $7,500 represents 18% of that family’s income. The Commonwealth Fund, a private foundation researching healthcare, found that few low-income people can afford health insurance when costs top 5% of their income. 18% of gross income is unaffordable for a low-income family to cover each of their children. If getting the necessary healthcare for uninsured children is the goal, this initiative”•in its current form”•fails.

So, “why not Portland?” Because most low-income Portland families would be better off paying as they go for their child’s healthcare than paying the outrageous deductible this initiative offers.

Brian Campbell is a Charles Koch Summer Fellow at Cascade Policy Institute, Oregon’s free market research center.

  • Jerry

    This initiative has been discussed here before. The brave, brave doctor behind it is a genius.

    We must pass it for the children. Why worry about silly little details. How can this man not know what to do? He is a doctor, isn’t he? That already makes him very, very smart. Much smarter than the rest of us.

    If the burder is greater on the poor, so be it. The doctor would not do anything to hurt anyone – he is so wise.

    Remember, the childrens are our future and if they are not healthy then the nation is at risk. Pay now or pay later. This measure must be passed!! It is essential to all. Vote YES.

  • Rupert in Springfield

    Ok – This ordinance is something that could only have been hatched in the mindless maelstrom that is government do it for the kids with other peoples money I’m so guilty feel good-ism.

    1 – The ordinance states that for each additional student who enrolls in a Portland School district, they already get $6,000 – $7,000 from the State. Thus the program would be largely self financing.

    Excuse me? Is Portland under the impression that money is simply a gift? Unless I miss my guess, that money is supposed to be for the education of that child. If Portland looks at it as simply some sort of slush fund, then perhaps it needs to be cut.

    2 – No additional taxes would be needed because they are going to get the $4.05 million from the projected $30mill surplus.

    Wow, so they ripped off the taxpayers and now they are going to spend on another “self financing” program. Why does this sound so familiar?

    Oh, but then the juicy part, which the author mentions in his article. The whole thing winds up with kids getting some sort of insurance plan with a $7,500 deductable. So this is essentially catastrophic insurance, which has some value, but precious little when it comes to the “Dennis the Menace” age demographic. Jeepers Mr. Wilson, this plan sounds like its from the sort of insurance company run out of the trunk of a car, not an office.

    Even better, they pick the arbitrary number of $50 a month premium with rates guaranteed to not increase more than the CPI. Wow, now that’s a really good idea. Lets apply that one to government as well, no rate, tax or fee increase more than the CPI. As someone who has gotten tired of seeing the windfall profits government has received of late from my property taxes, it would be nice to see government take a dose of its own medicine.

  • Bob Clark

    This and other communal efforts is what scares me about living in the city of Portland. It starts out small but before long it’s “lets lower the deductible and fully finance with a new fee or tax paid by residents and employers.” The whole idea in this proposal that families are going to migrate to Portland because of free healthcare is ludricous because families will be subject to increased taxes/fees to get this supposedly free healthcare. It’s also laughable because what family is going to move for a program with a $7,500 deductible, and as Rupert also points out, are we to assume there are no other costs to new students and all the new state funds can go just to this program.

    For those who worked hard most of their lives and saved, Portland gets scarier by the day. Why work hard at all because in the end you’ll probably have to hand most of your accumulated wealth over the communal PDX government so it can give it away to the irresponsible, including themselves.

    If there was some legal limits on the rate at which the city could tax and spend, I wouldn’t feel so threatened by the current slate of PDX councilors. The last time I felt o.k was when Bud Clark was Mayor way back in the 80s. And even he was just barely tolerable.

  • Crawdude

    I’m fairly certain that every school aged child in this state, who’s parents are poor, qualifies for the Oregon Health Plan.

    Why are the parents not enrolling them? What is the income ceiling cap for this city program?

    • dean

      CD….tens of thousands of lower-middle income families in Oregon have no health insurance. They are too high in income to qualify for the ever diminishing Oregon health plan, yet work at jobs that don’t offer coverage, and some have pre-existing conditions that make individual insurance coverage impossible.

      I don’t know the details of this program. But just based on this post, it would seem the purpose is to get enough coverage to pay for routine preventive care, thus the small co-pay. For most of these kids that would be a great step forward, since their families may not otherwise be able to afford to pay for routine doctor visits, thus put them off, and thus serious problems develop undetected. If a serious illness happens, then yes….these same families would get hit with unaffordable specialist or hospital bills, which is no different than where they are today. In other words, they gain routine, affordable diagnostic care and catastrophic care above $7500, but still risk accumulating a big debt between those.

      That seems a reasonable, affordable (to the public) compromise. I recall people on this site arguing against the cigarrette tax that would have paid for kids health care on the basis that it was unfair to smokers. Well…this tax appears to be more broad based and fair in that respect.

      Bottom line….we would not need any of these local, insufficient efforts if we passed a health care reform at the national level, or if Bush had not vetoed the SCHIP additional funding.

      • Crawdude

        Dean, if the parents of these middle class kids cared, they’d get their own insurance! If they don’t qualify for the OHP, then they can pay for their own!

        Sorry, no sympathy here, if you can’t afford to have kids, be responsible and don’t.

    • Brian Campbell

      Crawdude, there is no income cap for the WhyNotPortland city program under the original proposal. The designers of the initiative expected that, because the coverage is so basic, no one who could afford regular insurance would opt into the program.

      This original initiative is technically dead though: it will not go to ballot. The Portland City Council has passed a resolution to provide coverage to all uninsured children, not just those in Portland Public Schools but also those from birth until school age. So the City Council is working on their own program now. Hopefully they’ll be wise enough to include an income cap on this one.

      • Jerry

        Why on earth would anyone need an income cap? This is for the children. You are hurting the children of the rich if they choose not to provide health care for their own. ALL children MUST be covered. This isn’t Russia, you know.

  • Shirley

    CHIP – Oregon’s Children’s Health Insurance Program is available to families up to 185% of poverty. So the income guideline is $23,100 for a family of two, $30,000 for a family of four, and so on. There are over 42,000 recipients of CHIP coverage statewide.

    Catastrophic coverage is like life insurance, it covers your assets in the time of a catastrophy, but is not a broad-based insurance.

  • John Fairplay

    I have yet to see a rational explanation for why I should be charged to cover health insurance costs for someone else’s child. Health insurance is not part of any legal social compact of which I’m aware. No one has offered to pay for my health insurance. Or to buy me food, which I need infinitely more than health care.

    Health insurance for these children is the responsibility of their parents. If they don’t want to make the sacrifices necessary to pay for it, they can go without.

    • dean

      John…here are 3 rational, non ethical explantions for why it is in your self interest to chip into the pot to provide health care for kids whose parents cannot afford or cannot get health insurance through the market:

      1) Healthy kids learn better. Better educated kids grow up to be more productive and less prone to crime. Low productivity, higher crime, and higher imprisonment rates may cost you more than good health care.
      2) You yourself may fall onto hard times some day and need help from others.
      3) Delaying diagnosis and early care results in increased emergency room care later on, which you pay for hidden in your own insurance bill.

      • Crawdude

        I have no problem with those parents that are too self-centered not to get insurance for their kids, using the emergency room.

        The middle class parents who don’t insure their kids should foot the entire bill of this program…………….and no illegals!

      • Crawdude

        OBTW, I switched to iced white chocolate mochas for the summer.

  • cc

    “Health insurance for these children is the responsibility of their parents. If they don’t want to make the sacrifices necessary to pay for it, they can go without.”

    I agree.

    In fact, if they can’t afford health insurance, they shouldn’t be allowed to breed.

    THAT would remove deanie’s “hidden” costs.

    Better to nip it in the bud, I say: than to force the rest of us to subsidize irresponsible behavior.

    • Linda

      I am not saying that I necessarily support this initiative as it was written and the point is moot since it will not be on the ballot but after sitting through a quite lengthy presentation about it asking my neighborhood for support I gathered that the focus of the initiative was to get kids in to see a Dr regularly for routine and preventative care (vaccinations etc). Those without insurance typically only see the Dr in emergent situations which is not optimal. Yes there is a large deductible but hopefully if there is more regular care there is a less likely need for catastrophic care and should that happen it’s not much different than no insurance. Since it’s not great insurance there is less likelyhood that people that could insure their kids would use this plan.

      The separate issue of who should or shouldn’t be allowed to breed as was posed by cc based on their ability to afford health insurance is beyond judgemental given todays financial climate. I know several good responsible parents that find themselves laid off or barely able to pay their part of their families health insurance premiums. They are not irresponsible people just people like many of us that didn’t expect the job situation and the financial state that this country is now facing….they are not going to sell off their children now that they find themselves barely able to stay afloat.


  • Jerry

    If Linda is correct, then this whole thing is simply a scam brought on by a doctor who wants to see more patients, and thus, earn more money.

    • dean

      No Jerry…that is your cynical interpretation. This “whole thing” is about extending regular checkups and preventative care to kids who were born into families who for whatever reason, cannot afford insurance for them and thus forgoe regular doctor visits.

      As for cc….I think the point is the people in question have “already bred,” and their kids are already here. But I wouldn’t expect that to convince you of anything.

      • cc

        “As for cc….I think the point is the people in question have “already bred,” and their kids are already here.”

        Only the terminally obtuse would take that comment seriously, dork.

        But I’m not surprised that you would pretend to…

        The question involves irresponsible parents, Linda’s “…good responsible parents..” and everyone else. Primary responsibility for childrens’ well-being lies with parents, not the government. It’s idiotic to assume that government’s provision of free care won’t simply encourage, enable and increase the dependent class.

        The “Great Society” is a reasonably good model for the likely outcome of this sort of socialized medecine. With all the best intentions (I hope), the net result was a breakdown of families, incentives, hope and the rise of a class of lower-income people almost wholly dependent on government.

        Of course, that’s just what some want, isn’t it, deanie?

        • dean

          I agree with you (may be a first) that the “primary responsibility for children’s well being rests with parents, not government.” Where I disagree is that I believe government (meaning the rest of us) have a responsibility and an interest in helping out where parents are unable or unwilling to do their bit.

          As for the Great Society:

          The Civil Rights Act (1964) made discrimination on the basis of race illegal
          The Voting Rights Act made various actions by southern states to prevent African Americans from voting illegal
          The Food Stamp program keeps a large number of poor people, especially kids fed
          Head Start, which has been shown to reduce poverty and social problems in the kids that have gone through it
          Medicare and Medicaid, which extended health insurance to the elderly and poor (socialized insurance, not socialized medicine).

          Did these programs create a “dependent class”? I don’t know. Poverty existed before the Great Society, and it still exists at a reduced rate. Your grandparents are now “dependent” on “socialized health insurance,” the same sort (only more so) that the Portland program would extend to kids. Black people got “new” rights that they should have had all along. You preferred Jim Crow perhaps? You want to eliminate food stamps? What would that accomplish other than more hungry kids and poor people?

          I’ll give you some time to think up new names to call me. The old ones are getting stale, don’t you agree?

      • Jerry

        Kids DO NOT NEED regular visits to the doctor. They simply don’t.

        • dean

          Because Jerry says so?

  • Linda

    Thank you Dean, I couldn’t have said it better.