Oregon Health Plan

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The Oregon Health Plan (OHP) was an early attempt by a state to establish its own form of universal health coverage. More recently the states of Massachusetts, Maine, and Illinois have launched different efforts to change their health coverage laws.

In 1989, Oregon passed laws in order to establish universal health coverage and employer mandate in the state. But universal coverage never happened and Oregon's uninsured population is now back to what it was before (about 17%). The employer mandates never occurred. Instead, Oregon expanded Medicaid to more people by offering (covering) fewer services. Oregon prioritized a list that ranked medical conditions and treatments based on its determination of effectiveness and "net benefit." Every two years the state legislature would draw a line in the list based on funds available, with Oregon Medicaid paying for everything above the line and nothing below. Oregon also placed Medicaid recipients into capitated managed care organizations.

At first OHP seemed to do well, with studies of 1994-1998 reflecting positively on the program. About 100,000 new people were covered each month, reducing Oregon's uninsurance rate from 18% (1992) to 11% (1996). Twice the voters approved referenda raising state cigarette taxes to fund the plan.

Then Oregon ran out of money for its plan, and began imposing premium requirements. In just two years 75% of those enrolled in OHP (now OHP2) dropped out. This was one of the biggest government failures in the country. Within four months, enrollment fell by nearly 40 percent, and more afterwards.

The patients billed higher premiums for a shrinking benefit package. Coverage of dental care, outpatient mental health, medical supplies, prescription drugs and outpatient chemical dependency services were eliminated, though prescription drug coverage was later restored. Simplicity was also lost with the complex new rules of OHP2.

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