Oregon’s New Medicaid Waiver Implications

By Daniel Perez-Crouse

Oregon’s 1115 Medical Waiver is up for renewal in 2022  and a focus addressing Governor Kate Brown’s directives on healthcare quality/inequities and cost savings for the state budget is being proposed. A discussion hosted by the Oregon Health Authority (OHA) about this matter took place March 4. 

Jeremy Vandehey, the Director of the Health Policy and Analytics Division for OHA, provided a refresher on the nature of Medicaid, the program that provides healthcare for eligible low-income individuals. 

It is a state-federal partnership where the federal government pays three-quarters of the cost. Therefore, they also generally set the rules. This is where the waiver comes in, which “waives” one of the rules that run the program. 

“The idea is to create a situation for states to pilot changes,” Vandehey said. This lets states test things that may ultimately be part of the program long-term. 

Oregon’s waiver history dates back to 1994, when the Oregon Health Plan (OHP) was created and every five years or so, other initiatives have been introduced. However, he says there are some parameters to what can and cannot be changed – and the changes must be “budget neutral” to the federal government. 

Vandehey says that while the OHP has grown by 200,000 individuals, there is concern over what happens once eligibility re-determinations are done without the luxury of more generous pandemic parameters. That also doesn’t factor in the general cost issue. 

“Statewide healthcare costs have grown about 6.5 percent per person per year over the last several years,” he said. 

To this point, Rep. Rob Nosse says that, due to rising healthcare costs, the state’s ability to prioritize other social needs, such as housing and education, are negatively impacted. 

Nosse further notes that while the OHP is fully paid for, plenty of Oregonians get their care on the commercial market or from their employer and struggle to manage the costs associated. 

Bruce Butler, CEO of InterCommunity Health Network and Samaritan Health Plans, said that focusing on populations with the “highest need” is going to have the greatest impact. 

In order to have that impact, he sees a “global budget” for Coordinated Care Organizations (CCOs) being the ignition to get that going. This was part of the original CCO vision in 2012 but has yet to be realized. 

Vandehey said the desired budget was a fixed per-capita amount that would expand at a fixed rate of growth for at least several years. “Unfortunately, the rules at the federal level require us to reset that every year.” 

Former Governor John Kitzhaber echoed this sentiment and feels the current rate-setting process disincentives the kind of investments we need to address health equity. He feels this global budget will help the state stay within its sustainable health care cost growth target law (to not grow more than 3.4 percent per capita annually). 

In regards to those of the “highest need,” Vandehey posed this question: “Are we really committed to universal coverage? And if so, how do we make sure that we don’t lose traction over the next couple of years and continue to fill in gaps for those who remain without insurance?” 

He says despite Oregon expanding healthcare coverage to 94 percent of residents, there is still the implied six percent who remain uninsured. “And that uninsured rate doesn’t fall evenly across all populations,” Vandehey said. 

Two of the groups most affected are Hispanic or Latino at 12 percent uninsured and American Indian or Alaska Natives at 11 percent.

Annie Valtierra-Sanchez, Director of Southern Oregon Health Equity Coalition, discussed the reality of solving these issues of equity. 

The mission of her company is to change systems by creating community partnerships and collectively promote health equity that centers the voices of impacted community members. 

For example, she detailed instances amidst the pandemic and the recent wildfires when engaging with communities to understand their needs helped them. 

“We want community to be at the center of decision-making for any of our organizations. We take their input to guide our priorities,” she said. 

Kitzhaber said we “need to get money directly into the community to address those social circumstances themselves and empowering the people who are most directly impacted in playing a central role in designing the programs and investments that are going to be necessary.” 

He feels we should start with housing since it’s hard to address other health issues when you don’t have secure housing. 

Vandehey said throughout the spring they will be engaged with communities around strategies to help create these goals. The ensuing timeline will see drafting of the waiver application in June, with more community engagement afterword, and a submission by the end of the year.

Kitzhaber feels that now is the time for “bold” waivers that get the attention of the White House. 

“The question is whether congressional democrats have the appetite to push major non-COVID health policy legislation as we go into the midterm elections. What this means is the Biden administration is going to be looking for some quick wins to advance the health policy agenda, and that may be administratively through the waiver process. So I think we should take advantage of this opportunity.” 

See the full discussion at bit.ly/ORMedicaidWaiver.

Oregon’s New Medicaid Waiver Implications

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