Reform in Oregon
In 2014, many critical pieces of federal health reform take
effect. These reforms will have a significant impact on the
Oregon health insurance market and how Oregonians shop
Upcoming changes include:
• Most taxpayers will be required to have health
• Insurance companies will no longer be able to deny
coverage based on health.
• Oregon Health Insurance Exchange will offer one-stop
insurance shopping and help paying for premiums.
• Insurance plans in the individual and small group
markets will be more standardized and must include
essential health benefits.
Oregon Medicaid transformation is already under way:
• Coordinated care organizations will improve quality for
Oregon Health Plan clients while lowering costs.
State and federal reforms are resulting in many slightly lower cost and without being subjected to a
changes to the way health care is delivered in Oregon pre-existing condition limitation.
and to the way health insurance is regulated. Some
of those changes are already in place; others will be Shopping for insurance: You can comparison shop
phased in over the coming years. for insurance at www.healthcare.gov. This federal
website lists public and private insurance options by
Here are some of the key changes in the commercial zip code. By September 2012, insurers must include
(private) insurance market and in public health a plain language summary of benefits and coverage
programs: costs that should make it easier to know what
coverage you have and to compare your plan with
others. Learn more.
health insurance Lifetime coverage limits: Federal law now prohibits
insurance companies from placing a dollar limit
Already in place on how much they will cover over the lifetime of a
Dependent coverage: Insurers and employers member.
providing dependent coverage to children must
cover adult children up to age 26. This is true even Annual coverage limits: Rules are phasing out annual
if the young adult no longer lives with his or her limits on any “essential benefits” although some
parents, is not a dependent on a parent’s tax return or employers/insurers have been granted waivers from
is no longer a student. Both married and unmarried this requirement. The requirement applies to all but
children qualify for this dependent coverage. Learn grandfathered individual plans. For plans issued or
more about insuring young adults. renewed on or after Jan. 1, 2014, annual dollar limits
on coverage of essential benefits will be prohibited.
Preventive care: You may be eligible for preventative
care with no cost sharing, meaning you will not have Appeals: Federal law requires an appeals process if
to pay a deductible, co-payment, or co-insurance. a claim is denied. While Oregon already had a review
Learn more about preventive care issues. process for people whose claims are denied or not
paid as anticipated, federal law extends these rights
Children with pre-existing conditions: Insurance to people who work for large employers that self-
companies may no longer deny coverage to children insure.
under age 19 who have pre-existing conditions. Learn
more. Insurer spending on medical care: Insurers that
do not spend at least 80 percent or 85 percent of
Adults with pre-existing conditions: Oregonians premium revenue (depending on the insurance
who are turned down for insurance because of a market) on medical care are required to rebate the
health condition can buy coverage through the difference to enrollees. Most Oregon companies are
Oregon Medical Insurance Pool. Federal reforms allow already above the threshold and will not have to
people who have been uninsured for six months and rebate.
meet other requirements to buy this coverage at a
Rate review: Oregon’s rate review has been enhanced and enroll in coverage through the Oregon Health
with federal grants allowing the Insurance Division Insurance Exchange. They will be able to shop and
to give greater scrutiny to rate requests and to make enroll by going to the Exchange website, calling a
the process more transparent through website toll-free number, and working with community-based
improvements. Under Oregon law, the Insurance navigators and insurance agents. Coverage for plans
Division reviews and approves health insurance rates will start Jan. 1, 2014. For more information about the
in the individual, small group, and portability markets Exchange, visit http://www.orhix.org.
before these rates can take effect. Learn more at www.
oregonhealthrates.org. Financial assistance: Tax credits will be available
through the Health Insurance Exchange to help those
Small business tax credits: Businesses with the with incomes up to 400 percent of the federal poverty
equivalent of 25 or fewer full-time eligible employees level ($92,200 for a family of four) pay for monthly
may get a federal tax credit of up to 35 percent insurance premiums. People may also qualify for
of their premium costs if they meet the following help with co-pays, coinsurance and deductibles. To
requirements: estimate how much savings you might be eligible for,
• The average annual wage is less than $50,000. click here.
• The employer contributes at least half of the
premium cost. Large employer penalty. Employers with 51 or more
• The coverage meets minimum standards. employees who do not offer health insurance will be
The IRS administers this program. For details, consult subject to a penalty if any of its full-time employees
your tax advisor or review the IRS information at receives a tax credit to help pay for coverage.
www.irs.gov/newsroom/article/0,,id=220809,00. Large employers who offer health coverage will be
html?portlet=6. penalized if at least one full-time employee qualifies
for a tax credit because the employee’s share of
Out-of-network emergency costs: Non- insurance costs for employee-only coverage exceeds
grandfathered health plans (plans sold after March 9.5 percent of the employee’s household income or if
23, 2010) cannot require higher co-payments or co- the plan offered by the employer pays for less than 60
insurance percentages for out-of-network emergency percent of covered expenses.
room services than for in-network emergency
services. For example, if your plan pays 80 percent Essential health benefits. All health plans in the
of the costs to see an in-network doctor for an individual and small group markets must cover
emergency, it must pay 80 percent of the costs to “essential health benefits” in 2014. Each state has
see an out-of-network doctor. However, if the out-of- flexibility to design its essential health benefits
network doctor charges more than the contracted package, although the benefits must cover 10 defined
rate for the in-network doctor, your 20 percent share areas. Click here for information on Oregon’s process
of the bill will still be higher. for choosing essential health benefits.
2014 and beyond Comparing Health Plans. Starting in 2014, health
Requirement to buy insurance: Most people must plans in the individual and small group markets will
purchase basic health insurance coverage starting in be easier for consumers to compare. Plans will be
2014. Some people will be eligible for an exemption if labeled bronze, silver, gold, or platinum, depending
affordable coverage is not available. on what percent of health care costs the plan is
expected to cover. Additionally, Oregon is designing
Pre-existing conditions: In 2014, insurance one standardized bronze plan and one standardized silver
companies will not be allowed to reject anyone, plan that all insurers must sell. Since these plans will
regardless of age, based on their health. have identical benefits, consumers will be able to
easily compare different companies’ prices.
Oregon Health Insurance Exchange: Starting in
October 2013, individuals and small employers
will be able to compare plans, find out if they are
eligible for tax credits and other financial assistance,
Medicaid (Oregon Health Plan) have flexibility within their budget to provide services
alongside today’s OHP medical benefits with the goal
of meeting the Triple Aim of better health, better care
Already in place and lower costs for the population they serve. Visit
Coordinated Care Organizations: A Coordinated
http://health.oregon.gov/ for more information.
Care Organization (CCO) is a network of all types
of health care providers who have agreed to work
together in their local communities for people who 2014 and beyond
receive health care coverage under the Oregon Health Medicaid expansion: Americans who earn less than
Plan (Medicaid). CCOs will be able to better coordinate 133 percent of the poverty level (approximately
services and also focus on prevention, chronic illness $14,000 for an individual and $29,000 for a family of
management and person-centered care. They will four) will be eligible to enroll in Medicaid.
Essential health benefits:
Beginning in 2014, the federal Affordable Care Act still differ. For example, one bronze plan might have
requires health plans in the individual and small a $3,000 deductible and 30 percent coinsurance
group markets to offer a comprehensive package of (your costs for a service once the deductible is met).
items and services known as essential health benefits. Another bronze plan might have a $6,000 deductible
These packages differ by state but must reflect and no coinsurance. To make it easier to compare
services offered in a “typical employer plan.” Oregon plans, Oregon is designing standardized bronze and
is in the process of selecting a plan that exists today silver plans. All insurers in Oregon must offer these
to serve as its benchmark for health plan benefits in plans. Since the benefits are the same, you can
2014. more easily compare price, customer service and the
company’s network of hospitals and doctors.
Plan labels such as “bronze” and “silver” show
consumers that some plans pay more medical costs
than others. However, plans with the same label can
Private Insurance Plans in 2014
Average percent each plan covers of essential health benefits
Metal labels will make shopping easier
Bronze plans: Gold plans:
These plans pay an estimated 60 percent of the These plans cost more than bronze and silver plans
average person’s costs for essential health benefits. but pay an estimated 80 percent of the average
All insurance companies must offer bronze plans, person’s medical costs. All companies in the exchange
including a state-designed plan. The standardized must offer gold plans although they are not required
state plan lets consumers compare companies based to offer the standardized plan designed by the state.
on price, quality, service, and provider network (the
hospitals, doctors that contract with an insurer). Platinum plans:
These plans cost the most but pay an estimated
Silver plans: 90 percent of the average person’s medical costs.
These plans pay an estimated 70 percent of the Companies may offer platinum plans but are not
average person’s medical costs for essential health required to do so.
benefits. All companies must offer silver plans,
including a state-designed plan. The standardized
state plan lets consumers compare companies based
on price, quality, service, and provider network (the
hospitals, doctors that contract with an insurer).
Preparing for 2014
Oregon has several efforts underway to implement Timeframe: The Essential Health Benefits Workgroup
the reforms coming to the health insurance market in will forward its recommendation to the Oregon
2014. Below is an overview of four activities occurring Health Insurance Exchange Board of Directors
during the summer of 2012: and the Oregon Health Policy Board, which
will meet jointly in August. The two boards will
submit the recommendation to Gov. Kitzhaber for
Essential Health Benefits review. The Governor will make the final decision
and communicate that decision to the federal
Overview: Beginning in 2014, the federal Affordable government. Oregon’s selection must be made by
Care Act requires health plans in the individual Sept. 30, 2012.
and small group markets to offer a comprehensive
package of items and services known as essential Key issues: Balancing cost and coverage so that key
health benefits. Each state must select its own benefits are provided but at a cost that is reasonable.
essential benefits plan based on a benchmark plan
currently offered in the market. The benchmark plan Get involved: Meetings of the Essential Health
must be one of the following: Benefits Workgroup, the Oregon Health Insurance
• The largest plan by enrollment in any of the three Exchange, and the Oregon Health Policy Board are
largest small group products in Oregon’s small public. The Workgroup is accepting public comment
group market; on its draft recommendation through June 15
• Any of the three largest state employee health and will be asking for public comment on its final
plans by enrollment; recommendation in July.
• Any of the three largest federal employee health
plan options by enrollment; or More information: Visit the Essential Health Benefits
• The largest insured commercial non-Medicaid Workgroup website at http://www.oregon.gov/OHA/
HMO plan operating in Oregon. OHPR/EHB/index.shtml.
The essential health benefits will be required for plans
both inside and outside the Exchange, having far
reaching effects on health care reform and the health Oregon Health Insurance
insurance market in Oregon.
Exchange Plan Certification
Lead Agencies: Gov. John Kitzhaber established the and Carrier Participation
Essential Health Benefits Workgroup; the Oregon
Health Insurance Exchange Board of Directors and Overview: The Affordable Care Act requires all plans
the Oregon Health Policy Board are chartering the sold in the Oregon Health Insurance Exchange to
workgroup; the Oregon Insurance Division and be certified as “Qualified Health Plans,” or QHPs. That
Oregon Health Policy and Research are providing staff means they must meet both the federal requirements
work. in the Affordable Care Act and any other requirements
specific to Oregon. Federal requirements cover areas
such as plan benefit design, quality, transparency,
access, and cultural competency. Oregon also can 90 percent of these costs. The person covered
develop unique requirements to help further the by the plan pays the remaining costs through
Exchange goals and mission. deductibles, co-pays, and coinsurance.
• Depending on a person’s health and use of
Lead agency: Oregon Health Insurance Exchange medical services, these plans will actually pay
Corporation more or less than the average.
• Insurers in the individual and small group markets
Timeframe: Proposal to be finalized in summer 2012 must sell a standardized bronze and silver plan,
and officially released to insurance carriers in the fall with identical benefits and cost-sharing.
2012. • To sell in the Oregon Health Insurance Exchange,
insurers also must offer a gold plan (although it
Key issues: The Exchange Corporation must decide does not have to standardized).
on Oregon-specific requirements for QHPs. The The Oregon Insurance Division is designing the
corporation also is developing the requirements that standardized bronze, silver, and gold plans.
insurance carriers must meet to participate in the
Exchange. Lead Agency: Oregon Insurance Division
Get involved: The Exchange Corporation is Timeframe: Late September
receiving input from two stakeholder groups – one
consisting of insurance carriers and one composed Key issues: What will these plans look like? What
of consumer and small-business organizations. It kind of cost-sharing (deductibles, co-pays and
will post a draft proposal on its website for public coinsurance) will exist? For example, what should
comment. be the most a single person or a family should have
to pay out of their own pocket for medical services
More information: To be alerted about the public in a year?
comment period, subscribe to the Exchange’s
e-mail list at http://www.orhix.org/subscribe. Get involved: The Insurance Division is drafting
html. You also can check www.orhix.org for new rules to establish criteria for these plans. Visit the
information. rules page to find meeting dates for the external
advisory committee that will help with this and for
the public hearing.
More information: Background information and
health plans documents are posted here.
Overview: Starting in 2014, health plans for small
employers (1-50 employees) and individuals will
be standardized and labeled, making it easier
Stabilizing insurance markets
for consumers to compare. Plans will be labeled
bronze, silver, gold, or platinum, depending on the Spreading the risk
average percent of health care costs the plan is Overview: The Affordable Care Act no longer
expected to cover across a standard population (its allows insurance companies to deny coverage
actuarial value). to people with pre-existing health conditions.
• Bronze plans will cover an average of 60 percent This raises concerns that some insurance plans or
of the essential health benefits. Silver plans companies will attract an unequal share of costly
will cover an average of 70 percent of these members. This could cause costs to rise to the point
costs, gold plans an average of 80 percent of where few could afford coverage and the insurance
these costs, and platinum plans an average of company may not offer the plan. There is also
uncertainty about how much costs will change in Lead agency: Oregon Insurance Division
the individual health insurance market when many
uninsured people gain access to coverage in 2014 Key issues: Should Oregon develop its own risk-
and government-operated high-risk pools – today related programs or use those developed by the
serving some of the most costly Oregonians – U.S. Department of Health and Human Services? If
possibly no longer exist. Oregon develops its own programs, how do they
There are a variety of ways these issues will be
addressed in 2014. The strategies include these two Timeframe: Wakely Consulting Group, a nationally
programs, required by federal law: recognized health care actuarial firm, will provide
• Risk adjustment: This program transfers money initial recommendations on how Oregon should
from insurers with healthier-than-average approach these programs in early summer 2012.
members to insurers with sicker-than-average Wakely then will run simulations of the two
members. programs based on actual claims data from the
• Reinsurance: This is a temporary program (from last two years. Final decisions will be made in early
2014-2016) that assesses all insurers to help pay fall. Oregon must submit its model to the federal
the claims of individuals with high medical costs. government by late 2012.
Insurers will be required to pay assessments to
a nonprofit reinsurance entity, which will make
reinsurance payments to insurers covering high-
Federal health reform site. Learn about the Affordable Care Act. Reform timeline.
Oregon Insurance Division
Regulates insurance companies and is implementing many federal and state reforms. Also available to help with
health insurance questions or concerns.
Oregon Health Insurance Exchange
Future marketplace where small employers and individuals shop for health insurance.
Oregon Health Authority
Oversees Oregon Health Plan reform, including Coordinated Care Organizations.
Oregon Medical Insurance Pool
High-risk pool for people with pre-existing health conditions.
Oregon health insurance rate review
Find your company’s rate request; comment online. Learn how the state reviews rate requests.
Medicare and health reform
How does the health care law affect Medicare?
Internal Revenue Service
Details of the small business health care tax credit
Kaiser Family Foundation
Non-profit, private foundation with focus on health policy analysis and communication
Health Reform Timeline Summary
This is a tentative timeline, which is updated regularly.
Insurance Division finishes
design of standardized
Bill in 2013 session Oct. 1, 2013:
August 2012: conforms Oregon law Exchange opens for
First coordinated care to federal reform law business Jan. 1, 2014:
Coverage starts for
Gov. decides on
Nov. 2012: plans purchased in
essential health April 2013:
State risk Exchange.
benefits, sends to feds Insurance Division
deadline to approve
if any, due to feds
insurers’ 2014 plans
June July Aug Sept Oct Nov Dec Jan Feb Mar April May June July Aug Sept Oct Nov Dec Jan
Oregon Insurance Division
June 28, 2012: Health insurance exchange prepares to serve Oregonians
June 4, 2012: Oregon Seeks Public Comment on Essential Health Benefits
May 16, 2012: Oregon receives additional funding for exchange
May 3, 2012: Oregon governor and Obama administration announce agreement to improve care for Or-
egonians on Medicaid
March 9, 2012: Gov. Kitzhaber signs bill to create new health insurance marketplace
May 30, 2012: Oregon’s Medicaid experiment represents a “defining moment”
June 2, 2012: What Oregon small business owners want from the state health insurance exchange
• CMS waiver request: Oregon health plan demonstration project
• Oregon’s Health System Transformation: Changing the Rules of the Game for Better Health and Lower
Costs, Portland City Club, April 6, 2012
Private insurance market
• Essential health benefit plan comparison
• Coordinated care organizations
• Primary care homes (for patients)
• Primary care homes (for providers)
• Oregon Health Plan clients and coordinated care
Oregon Health Insurance Exchange
• Oregon Health Insurance Exchange FAQs
• Do I need to pay anything for preventive care?
• Extending dependent coverage to age 26
• Enrolling Oregon children in health insurance