Tags: Oregon | Health Care | Corruption | Price

Corruption, Staggering Price Hikes in Oregon Threaten Health Care

By    |   Thursday, 16 July 2015 08:51 PM

The perils of government involvement in our health care system continue to become obvious as Obamacare becomes an apparent permanent fixture of the political landscape.

Perhaps nowhere are those perils more obvious than in Oregon where the system has been a burden on taxpayers from the moment Obamacare was signed into law.

Shortly after the federal health care spending spigot opened, Oregon set out to create a model of government-run health care. They were successful but certainly not in the way they intended.

Led by then Gov. John Kitzhaber (D), the state established Cover Oregon, its own Obamacare exchange. After receiving $300 million in funding, the exchange failed to sign up a single person. Concerned that such an embarrassing situation would hurt his re-election chances, the governor dispatched his political team to oversee the exchange. As one would expect they were experts in polls and messaging, not technology and health care.

Despite being told that the exchange would function with more time and some more beta testing, the governor's chief political advisor Patricia McCaig decided she could not wait. Election day was around the corner and even though McCaig admittedly knew little about health care reform or the technological problems behind the Cover Oregon exchange the decision was made to minimize any political damage associated with it and fold it into the federal system. McCaig then directed the state attorney general to sue Oracle and other contractors working on the exchange.

The governor won re-election, in part because the Republicans nominated someone who supported Kitzhaber's efforts to expand government's role in the state health care process. Soon after, the wheels came off the Kitzhaber political machine. The governor was forced to resign due to a potential bribery scandal involving his fiancé and clean energy environmental groups.

The investigation also focused on Cover Oregon. State officials reported that Kitzhaber's political team attempted to destroy email and other evidence regarding decisions made about Cover Oregon and that has gotten the attention of congressional investigators and watchdogs.

Led by Rep. Jason Chaffetz (R-Utah) and other members of the House Government Reform and Oversight Committee, an effort to retain the evidence has begun. Chaffetz demanded that material not be destroyed and recently dispatched a second letter to the Obama administration wanted to know their role in the Cover Oregon exchange.

As investigators attempt to get to the bottom of things, Oregonians are facing significantly higher health care prices in 2016 even though the Kaiser Foundation Health Plan of the Northwest proposed cutting rates by an average of 2 percent. Despite the Kaiser recommendation, Oregon's Health CO-OP proposed a 5.3-percent average rate increase for 2016, but the state's preliminary decision calls for a 19.9 percent average hike. As egregious as that sounds, health and dental plan provider Moda Health Plan, which reach manages health plans in California, Alaska, Washington and is the market share leader in Oregon’s Individual market, asked and received approval for rates in Oregon that are 25.6 percent higher on average.

Why did Moda request such a steep price increase when its projections showed medical costs rising by just 4.6% and prescription drug cost climbing by only 5.2 percent? Per Moda, the health status of those enrolled in 2014 was much worse than anticipated and resulted in Moda generating financial losses. In explaining the rationale behind approving the rate increases, Insurance Commissioner Laura Cali claimed the rate increase were necessary to ensure the companies are able to stay afloat.

If one thinks such increases are only happening in Oregon, think again. One of the dominant health care insurers in the U.S. — Blue Cross and Blue Shield — submitted rate increase requests to the tune of 23 percent in Illinois, 25 percent in North Carolina, 30 percent in Maryland, 31 percent in Oklahoma, and a 54 percent in Minnesota.

While no one would want to deny a fellow citizen health care coverage, the magnitude of such price increases will crush consumers. While some will float the idea that these price increases “were approved in order to protect consumers from extreme rate increases in the future” as our population skews older in the coming years and leads to an explosion in healthcare costs, how long until the average American can no longer afford health care? If they can’t it means costs for government subsidies will continue to increase and means once again taxpayers will be asked to foot the bill for a less than efficient program that they probably wouldn’t have voted for.

The politicians might not think twice of throwing $300 million into the wind to head their re-election chances, but health care consumers and taxpayers are learning the hard way — there is no free lunch.

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The perils of government involvement in our health care system continue to become obvious as Obamacare becomes an apparent permanent fixture of the political landscape.
Oregon, Health Care, Corruption, Price
Thursday, 16 July 2015 08:51 PM
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