Description

On August 16, 1991, Oregon petitioned the Federal Government for permission to use Federal funds in a novel health care financing program. The proposed program is premised on two basic assumptions:

1. all uninsured poor people should have publicly funded health care coverage, and
2. coverage for this population can be made affordable to the taxpayers through a combination of two mechanisms: the explicit prioritization of health care services, and the delivery of covered services through managed care systems.

Oregon’s plan to revamp its system of health care coverage was motivated by the steadily increasing costs of health care to the public treasury and the large number of Oregonians who have no health insurance. The State has estimated that between 400,000 and 450,000 Oregonians, or about 16 percent of the State’s population, are uninsured.

To address this latter problem, the Oregon legislature passed the Oregon Basic Health Services Act in 1989, which established three mechanisms for increasing access to health insurance. For individuals who could not qualify for private insurance due to a ‘‘preexisting health condition, ’ the State established a high-risk insurance pool with subsidized premiums. For individuals whose employers do not offer health insurance benefits, the State established a program that provides incentives for, and ultimately mandates, small businesses to provide such insurance to their employees. And for poor uninsured individuals, the Basic Health Services Act expanded the State Medicaid program to cover all residents with incomes up to 100 percent of the Federal poverty level (FPL).