Health Care In The States

Oregon To Feds: Give Tax Credits To Shoppers Who Bypassed Troubled Exchange

By Marissa Evans and Mary Agnes Carey

January 15th, 2014, 5:16 AM

Two officials from the Oregon governor’s office were on a mission in D.C. Tuesday — trying to get a federal go-ahead to compensate individuals who purchased insurance on their own because of the breakdown of the state’s health care exchange.

Image by Darwinek via Wikimedia Commons

Sean Kolmer, the governor’s health policy adviser, and Dan Carol, director of multi-state and strategic initiatives for Gov. John Kitzhaber’s administration, said they would meet with officials at the Department of Health and Human Services and seek permission to give tax credits to consumers caught between the glitch-ridden exchange website and their need for health care coverage beginning Jan. 1. To be eligible, Oregonians would need to have to have attempted to sign-up for a plan through Cover Oregon but wound up purchasing a health plan outside of the exchange to ensure continuing coverage.

“They had to be somewhere in the queue, and the only reason they went outside the market was because (Cover Oregon) wasn’t helping them (sign-up),” Kolmer said of the criteria to qualify.

Kolmer said that he understood from HHS that other states hope to provide similar compensation but said he didn’t know which states.

About 170,000 people signed up for health insurance beginning in January through Cover Oregon or the Oregon Health Plan, the state’s version of Medicaid, according to a press release on the exchange website. Of those, about 20,000 people received private coverage and more than 35,000 joined OHP. More than 114,500 people enrolled directly in the Oregon Health Plan through the Oregon Health Authority.

But Cover Oregon has been a headache for consumers and officials alike.  The state has paid Oracle Corp. $92 million so far to build its exchange site, only to have to give up on the website and turn to processing paper applications. Months later it’s still not working as it should. Kolmer said the state isn’t paying the company now unless it gets the website fully functioning and “working end to end” by March 31, when open enrollment ends. The state is withholding $18 million so far in payments.

Due to the technical problems, Oregon state officials have been discussing a variety of fixes and some officials, including Republicans in the legislature, have called for joining the federal exchange instead of the state continuing to run its own. But the state currently is considering using “some of the federal [exchange] technology” rather than joining the federal exchange, said Ariane Holm, a spokeswoman for Cover Oregon.

An Oregon official said that converting to a federal exchange was not discussed when state representatives met Tuesday with HHS.

Although the state has set up an interim process that allows people to shop for and enroll in health care, it isn’t what state officials envisioned,  Kolmer said. “It obviously streamlines the process, but it doesn’t make it as easy as everyone would love for it to be.”

5 Responses to “Oregon To Feds: Give Tax Credits To Shoppers Who Bypassed Troubled Exchange”

  1. Renee says:

    If the objective was for everyone to have health insurance, why couldn’t we have just given everyone a tax credit for having it, in the first place – rather than building all of these expensive exchanges that don’t work? I just don’t get it. . . . .What a colossal waste of taxpayer money and a huge government overreach. . . . .Also something that in the long run may prove to wreck the insurance industry and has already hurt the consumer. They just don’t know how badly yet. Wait till they get to use their new “narrow network” that they don’t understand!

  2. Ray says:

    As per existing law, everyone in America has basic, hospital-only, coverage in the event of a catastrophic event. You’re never turned away from an ER until you’re stable, regardless of your ability to pay. Hospitals eat this expense, or are reimbursed by the Gov’t.

    Here’s a novel solution: don’t change anything. Raise taxes like they did, take these new taxes, and pay those bills you are already paying. People who want insurance can get it, like they do now. Everyone else gets the safety net, we all pay a little extra for. No mandate, nothing forced, no exchanges, no building systems from scratch, no 30,000 page regulation, no trillion dollar cost, nada.

    For 99% of people out there, a checkup is far less than a month’s premium. They’d be better off “uninsured”, paying for all of the mundane stuff out of pocket, and having a safety net when something goes really wrong.

  3. Michael Bertaut says:

    I think it is safe to say the ACt was more about a federal regulatory absorption of the small group and individual markeets, than actually giving a bunch of people coverage. The authors wanted to give everyone coverage, but on their own, DC-Franchise enabled terms.

    As far as the Oregon idea, I could easily make a cogent case that EVERY healthcare exchange website failed, so if Oregon is allowed to distribute the advanced tax credits without federal oversight, they might as well just send everybody a check, because that same argument is quite ubiquitous nationwide. Except maybe in Kentucky?


  4. Trevor Green says:

    Everyone commenting here is right on. There is no reason that you should have to go through the exchange to get a tax credit. You don’t have to do that with a mortgage.

    This is just an effort to slowly move toward a single payer system.

    The incompetence in the creation of the exchange is not an incidental set of technical issues that can be overcome, it is fundamental structural problems with bureaucracy. There is no true accountability without competition. You must be able to remove your business and go elsewhere. This is the opposite of a government run operation. So even if they bought a perfect solution from the private sector they still wouldn’t be accountable for even the smallest of mistakes. They just say “We will consider it”, or “We will look into it”. With no true pressure to do so.

    That is why this should never have happened and why it is pure arrogance to attempt to continue down this path. They need a nation wide change today that allows you to just get the subsidy when you file your taxes.

  5. Nick says:

    Ray: “As per existing law, everyone in America has basic, hospital-only, coverage in the event of a catastrophic event. You’re never turned away from an ER until you’re stable, regardless of your ability to pay.”

    Ray, and everyone else making this argument: here’s the thing to consider. People do get diagnosed with cancer, leukemia etc. In case of some forms of leukemia (and increasingly, other cancers), there are life saving treatments that require life long checkup and an expensive medication, taken daily. Do you think the emergency room is going to provide?