Bill proposes health-care exchange

The Oregon State Senate approved Senate Bill 99 last week. The bill outlines the functionality of a health-care “insurance exchange” in Oregon.  

According to Dave Rosenfield, executive director of the Oregon State Public Interest Research Group (OSPIRG), the Oregon Legislature put together an insurance exchange in 2009. The aim of an insurance exchange is to bring the buying power of a large group of people together, making health insurance cheaper for everyone.  

“A health insurance exchange is one very important strategy to lower to the cost of health insurance for families and small business in Oregon,” Rosenfield said. “The way it does that is by pooling the buying power so you can negotiate and get a better deal on health care.”  

The federal Affordable Care Act, passed last year, requires states to set up health-care insurance exchanges by 2014.  

Oregon was ahead of the curve in moving towards a health-care exchange before the federal government passed legislation, Rosenfield said. However, if SB 99 passes through the Oregon House of Representatives in its current form, it will negatively affect an exchange, according to Rosenfield.  

Rosenfield explained that there are two major problems with the bill. 

“The way it ought to work is by setting standards,” Rosenfield said. “And the exchange will select the best plans at the best price.”

However, the new bill requires the exchange to accept all plans regardless of standards.  

The other major problem Rosenfield sees with the bill is the organization of the exchange.  

“The bill allows health insurance companies to sit on the board of the exchange,” Rosenfield said.

Of the nine members on the board of the exchange, “two are allowed to have a conflict of interest,” or to be representatives of insurance companies, according to Rosenfield.  

“Allowing them on the board undermines the whole thing. That’s the reason virtually no consumer group…supports the bill,” he said.  

According to a letter to the State Legislature signed by a number of health care organizations, including AARP-Oregon, the Oregon Health Action Campaign and the Oregon Nurses Association, “Senate Bill 99 fails to create a health insurance exchange capable of effectively advancing lower cost, better value health insurance options for consumers and small businesses.”  

The letter alleged four major flaws in the bill.  

First, the bill defines the exchange in a way that doesn’t allow for negotiation with insurance companies for lower premiums.   

 The bill also allows parties with a conflict of interest to become members of the board, the letter said, echoing Rosenfield. In its current form the bill “fails to include adequate protections to prevent insurance companies from cherry picking the healthiest people into plans outside the exchange,” the letter said.

Finally, the bill doesn’t outline funding of an exchange.  

Rosenfield and the authors of the letter agree that if flaws in the bill are fixed, the Oregon exchange could help to lower the cost of health insurance “across the board.”  

In fact, if the exchange is successful in decreasing health insurance costs, students might see their tuition decrease as well, according to Rosenfield. He said that a decrease in health care outside of the university could lessen the strain on students’ wallets when the time comes to pay tuition, because a significant part of student tuition and the university budget are devoted to student and faculty health insurance.  

“Whether you are a student who already pays their own health care, are not insured at all or are covered by your parents, this exchange will effect you,” Rosenfield said.  

According to Rosenfield, an exchange would stabilize the insurance plans of students’ parents and would allow students without insurance to afford health care. It would also make shopping for health insurance easier for students.  

“The idea is it’s a one-stop-shop to compare different kinds of plans apples-to-apples,” Rosenfield said.  

According to Dana Tasson, executive director of PSU’s Center for Student Health and Counseling, the convenience of straightforward comparisons is essential to students, who often base the continuation of their education on the availability of health insurance.

“Even with our services, many would have to leave school if faced with an expensive illness,” Tasson said.

He cited a university-wide survey in which 54 percent of PSU students said that they would leave school if they needed to finance an expensive surgery.  

SB 99 will enter the Oregon House of Representatives this Friday for a hearing, according to Laura Etherton, a health care advocate with OSPIRG. A decision on the bill will be made before the end of the month. ?