Oregon checks off next step in becoming 3rd state to launch a Basic Health Plan program for ~100K residents

It's been about five months since I last posted about the status of Oregon's pending Basic Health Plan program:

As reported by Megan Messerly of Politico in 2022:

In Oregon, Democrats passed a bill in March to establish a basic health program, the details of which are being ironed out by a task force that began meeting this week. In Kentucky, Republicans approved $4.5 million in state funds this spring to set up a basic health program, which was signed into law by the state’s Democratic governor. An estimated 85,000 Oregonians and at least 37,000 Kentuckians will be eligible to enroll in the plans as soon as next year.

Unfortunately, Kentucky got cold feet on their BHP implementation, but Oregon is still full steam ahead. In October 2020, The Lund Report gave an update on the status of Oregon's BHP program:

...The Bridge Health Program, as it is called, would be available to individuals making under 200% of the federal poverty level...Those above 200% of poverty will still be eligible for coverage on the health insurance marketplace.

...The path the task force decided to take — with input from the Centers for Medicare and Medicaid Services — was to create a basic health plan utilizing a federal program known as the 1331 waiver. It's named for the section of the 2010 Affordable Care Act that authorized it.

...The program's biggest target, at least initially, is individuals who have remained on OHP during the coronavirus pandemic despite no longer qualifying.

...state officials estimate the bridge program could enroll an estimated 55,000 people in 2023.

That highlighted portion above is key, as it refers to the millions of people nationally who have been on Medicaid or CHIP throughout the pandemic but who have started to be kicked off in some states since the beginning of April, when the continuous coverage provisions sunsetted.

In April 2023, the Centers for Medicare & Medicaid Services (CMS) approved Oregon's 1115 waiver (Phase 1):

CMS Approves Oregon Health Plan Demonstration Amendment Helping Individuals Maintain Medicaid Coverage

April 20: CMS approved an amendment to the Oregon Health Plan (OHP) demonstration that authorizes Medicaid coverage for individuals ages 19 through 64, with incomes from 133 through 200 percent of the federal poverty level, who are currently enrolled in OHP under a guarantee of continued eligibility originally enacted in the Families First Coronavirus Response Act (FFCRA), which expired April 1. The amendment will help maintain coverage following the expiration of the Medicaid continuous enrollment provision under FFCRA. This amendment will streamline retention of coverage by not requiring people to move to the Marketplace. The state is actively exploring options for long-term coverage for this population, including potentially establishing a Basic Health Program. Information can be found here.

Well, this week Oregon moved to the next step (via Oregon Public Broadcasting):

Oregon becomes 3rd in nation to seek federal approval for a basic health program

A group of volunteer advisors to the Oregon Health Authority has voted Tuesday to make the state the third in the nation to seek federal approval for a basic health program.

...The Oregon Health Policy Board voted unanimously to approve Oregon’s blueprint application. It was the last step in a lengthy policy-making process needed for state approval of the plan after a task force last year recommended moving forward with it.

It’s the latest in a series of incremental steps policymakers have taken that move the state in the direction of universal health coverage, including allowing all children in Oregon who qualify for Medicaid to stay enrolled without annual re-evaluations until their 6th birthday, allowing adults to stay enrolled for two years at a time, and extending coverage to undocumented youths and adults.

The basic health program, set to launch July 2024, will cover people who earn 138% to 200% of the federal poverty level.

In Oregon, about 100,000 people will qualify, the state health authority estimates.

This is higher than the 85,000 estimate from a year and a half ago, presumably based on more recent Medicaid Unwinding data.

There's also some interesting details on the funding of Oregon's BHP program once it ramps up:

Oregon Health Authority officials believe that they will be able to fund the BHP almost exclusively with federal dollars.

While Oregon provides 40% of the funding for the state’s Medicaid program and the federal government kicks in 60%, the Health Authority claims the BHP will be more than 99% federally funded.

Federal funding for BHP programs is 95% of the amount which the same enrollees would have received in federal ACA subsidies had they enrolled in those instead. The state has to come up with the balance, but depending on how the BHP program is structured, it doesn't necessarily have to pay anything close to 40% of the total cost.

The state’s 2023-25 budget anticipates up to $533.5 million in federal funding from those diverted tax credits for the BHP trust fund.

Oregon will need to contribute $1 million in ongoing funding for two program costs that aren’t allowable under federal rules: $800,000 for administrative costs at OHA, and $200,000 to provide abortion care that is a required benefit under state law but barred from federal funding by the Hyde Amendment.

State officials initially feared the Centers for Medicare and Medicaid Services would not allow federal BHP dollars to cover behavioral health treatment, which Oregon bills for separately from other Medicaid services. That would have added considerably to the BHP’s state funding requirement. But the federal government recently affirmed Oregon can use federal dollars for behavioral health treatment that coordinated care organizations bill for separately.

Of course, the enhanced ACA subsidies provided by the Inflation Reduction Act are currently scheduled to sunset at the end of 2025; if they're allowed to expire, that will also mean considerably less federal funding available for the BHP program as well.

The OPB article then goes into this weirdly negative mode by noting that shifting a large chunk of ACA market enrollees over to the BHP program will have an impact on ACA premiums as well...but this is also something which has happened in every state which expanded Medicaid under the ACA after several years of not doing so, so I'm not sure I see that as being terribly controversial.

The article also points out that people in BHP program states who earn between 138 - 200% FPL aren't eligible for ACA exchange subsidies, taking a critical tone...even though, again, there have been no complaints to my knowledge among the ~1.2 million BHP enrollees in Minnesota or New York about their programs. Again, this is also the case already for Medicaid enrollees in Oregon--if you're eligible for Medicaid, you're not eligible for ACA exchange subsidies. I fail to see why this is a bad thing.