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.