Over the course of the next several months, we’ll be writing a series of articles outlining the impacts of the One Big Beautiful Bill Act or H.R. 1 (OBBBA). The law changes are extensive and multi-faceted, interacting closely with Oregon state law. We will break these down one-by-one.
The OBBBA put into law a series of changes to the country’s Medicaid system. Medicaid (Oregon Health Plan, in Oregon) provides health insurance for low-income adults and children, people with disabilities and other vulnerable members of society.
Medicaid is jointly funded by states and the federal government, who each have a different role in administering the system. The federal government provides guardrails, and the states then design programs within those guardrails (or at times outside of those through special waivers or other programs).
These guardrails are numerous but include mandatory populations of whom must be covered, minimum benefits, cost-sharing limits and others.
Under the OBBBA, the federal government made changes to the guardrails in a number of key ways. Notably, this includes:
- With some exceptions, adults aged 19-64 are required to complete at least 80 hours per month of employment, work training, education or volunteering.
- States must conduct eligibility redeterminations once every six months.
- Immigrant eligibility restrictions, including restrictions on refugees, asylum recipients and others.
The Oregon Health Plan (OHP) is fairly expansive in terms of who it covers and what services are covered. It also generally only requires redeterminations once every two years, meaning that the requirement to conduct these checks every six months is going to significantly change the status quo.
This law was designed to, and will, result in a decrease in Medicaid-covered individuals across the country. This will be felt especially hard in Oregon, where Medicaid currently covers nearly 1.4 million people, or one in three adults. Children are estimated to account for over a quarter of this total.
How this impacts hospitals
Hospitals, particularly safety-net hospitals, see patients regardless of whether they are insured, uninsured, or based on type of insurance. Oregon law requires nonprofit hospitals to provide charity care to individuals whose household income is less than 400% of the federal poverty line – with qualified individuals under 200% of FPL required to receive a 100% write-off of costs to those patients.
Currently, Oregon’s Medicaid system has been successful in ensuring that a broad range of people are covered for a broad range of services, and so the number of uninsured individuals is relatively low compared to some other states.
It does come at a cost, however. In order to cover an expansive number of people and services, the rates that providers are reimbursed for services are far below cost. While it varies across institutions, Asante receives about 67 cents in reimbursement for every $1 it spends in caring for someone who has OHP.
In other words, right now, we receive $67 dollars in revenue for every $100 we spend on doctors, nurses, pharmaceuticals, supplies and overhead to provide those services – a structural deficit that has led to financial instability for hospitals across the state.
What happens when otherwise-eligible individuals are kicked off of Medicaid? They still come to the hospital, but they are usually sicker. Their diagnoses are often more complex, aggressive and expensive and they are now completely uninsured.
Under Oregon’s charity care laws, the patient often doesn’t pay a penny for this care – and hospitals go completely uncompensated.
In short, an already incredible tenuous situation will be made substantially worse. Without intervention at the state or federal level, this could deal a fatal blow to hospitals already on the brink.
What it means for you?
This will have a wide-ranging impact on Oregonians. For those who are Medicaid-eligible, they will have to jump through more hoops to retain coverage and risk unintended losses of coverage.
It would be simple for hospitals to just increase revenues with commercial insurance to keep margins positive, however that would increase costs for commercial patients and insurance companies won’t allow the cost share needed to neutralize the Medicaid impact Hospitals, especially ones with larger Medicare and Medicaid payer mixes, are going to have to likely make significant service cuts, or may not be able to stay open at all.
This will affect Oregonians ability to seek care for themselves and their families, but also could cripple economic development. Attracting business and human talent to an area requires functioning and strong health care systems – when these go away, so will the future economic prospects for entire cities and towns.
What next?
We recognize that this is bleak; however, we cannot sit back and hope that the situation resolves itself.
Asante will speak out to protect (and hopefully improve) these vital programs; however, it is not enough.
We need an informed and active citizenry to provide your voice to your elected officials. We urge you to speak out to protect funding for these programs and to ensure that your local health care systems are able to receive enough funding to stay afloat.
To find your local or federal legislators, visit https://www.usa.gov/elected-officials.
