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Oregon Medicaid experience: Don’t go there, Idaho

Oregon Medicaid experience: Don’t go there, Idaho

Brandon Hershey
July 14, 2014
July 14, 2014

In 2001 Oregon made an attempt at Medicaid expansion to reduce the number of uninsured in the state; the expansion was named the Oregon Health Plan Standard (OHP standard).

Under the plan, Medicaid was expanded to low-income adults. However, expansion beneficiaries were forced to pay high premiums for a low number of benefits. The rationale behind expansion was to reduce the uninsured and maintain costs regardless if the outcome was quality health care or not.

By 2004, more than 50 percent of enrollees in the OHP standard had dropped from the program. In 2007 an article in the academic journal, “Health Affairs,” deemed the program a dramatic shift from the state’s “core principles in health reform.” Despite the failure of the initial launch in 2001, in 2008 Oregon officials decided to reopen enrollment to 30,000 lottery-picked individuals.

Medicaid expansion in Oregon has left Idaho with volumes of research that should lead Idaho to reject expansion as a plausible idea. After the 2001 expansion, the rate of uninsured has flatlined, even increasing from 16 percent to 20 percent in some years. Expansion created a crowding out of private insurance as employers found it easier to pass employees off onto the state’s Medicaid program and individuals had no incentive to buy private insurance. Physicians stopped admitting new Medicaid patients under the expansion, citing low reimbursement rates and high administrative costs.

Medicaid costs grew significantly under expansion in Oregon. In 2001 the state paid $2.5 million, by 2013 Oregon paid $5.5 million to cover Medicaid enrollments.

Medicaid costs in Idaho have been on a steady rise and are expected to climb by 70.8 percent by next year. The Heritage Foundation projects that expansion could cost Idaho close to $95 million by 2022 (if the federal government keeps the promise to maintain 90 percent funding!).

As Idaho faces the decision to expand Medicaid in the upcoming legislative session, lawmakers and citizens should look to the experience in Oregon. Idaho is wise to understand that “insanity is doing the same thing over and over again, but expecting different results.”

Taking up the chant of Medicaid expansion under the guise of social justice will be detrimental to Idaho. Idaho needs to drive the conversation away from Medicaid expansion, looking toward alternatives that will work for the betterment of the people instead of expanding upon an already failing federal program.

Brandon Hershey is a summer intern from the Charles Koch Institute. He previously interned with the Heritage Foundation and the Centennial Institute.

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