Under federal $1 billion agreement, Oregon will expand Medicaid coverage

Under a new agreement, the federal government will give Oregon $1.1 billion to guarantee continued free health care coverage to tens of thousands of young children in households with low incomes and offer wider coverage to low-income young adults, especially those with special needs.

The agreement, announced Wednesday in a conference call with Centers for Medicare & Medicaid Services officials and Oregon Gov. Kate Brown, also includes expanding Medicaid coverage to include housing and food support. 

The social services help means Medicaid in Oregon will pay recipients for rent, utilities and other housing needs for up to six months; provide help with housing applications, moving and eviction prevention and assign a case manager to coordinate services. The Oregon Health Plan, the state’s version of Medicaid, will also provide cooking and nutrition classes, food boxes, medically-appropriate prepared meals and help getting federal food benefits.

In addition, Medicaid in Oregon will pay for air conditioners prior to a heat wave, air filters when wildfire smoke clogs the air and generators during extreme cold events. Medicaid providers in Oregon have already done this, but the agreement means coverage will be expanded, officials said.

Both Chiquita Brooks-LaSure, the administrator of the federal Centers for Medicare & Medicaid Services, and Brown called the agreement groundbreaking. 

“Keeping the young children continuously enrolled in Medicaid up to the age of 6 to prevent gaps in coverage regardless of changes in their financial circumstances is a paradigm shift,” Brown said during the call. “We’re going to be the first state in the country to do this.”

The Oregon Health Authority said it expects to include an additional 9,050 children under 6 to the Oregon Health Plan by July 1, 2023. By July 1, 2026, it expects to have an additional 51,400 children covered. Currently, 508,000 Oregonians under 21 years old are covered by Medicaid, said Liz Gharst, an Oregon Health Authority spokesperson.

The Oregon Health Plan offers free physical, mental and dental care coverage to adults earning about $1,550 a month or about $3,100 for a family of four. Children in a single parent household earning nearly $3,500 or those in a four-person household earning nearly $6,700 a month qualify for state and federal coverage.

About two-thirds of Medicaid is paid by the federal government, and the rest is paid by the state.

Under the agreement, the federal government will pay $1.1 billion to Oregon to expand benefits. The state estimates the new coverage will cost Oregon nearly $500 million from the general fund through June 30, 2027. 

Statewide, 1.4 million people, or more than one in three Oregonians, are covered by the health plan. Since the pandemic hit, Oregon has added about 400,000 to the Medicaid rolls. Brown said the pandemic made disparities in health coverage apparent and had a disproportionate impact on people of color, those with low incomes and rural residents.

“(The state) learned critical lessons from the pandemic: such as the benefits of maintaining continuous enrollment to prevent gaps in coverage, increase access to care, reduce the number of uninsured and underinsured individuals, and promote better health outcomes overall,” Brown said.

Some of those lessons are being incorporated into the agreement. Besides guaranteed coverage for children, the agreement will ensure people aged 6 and older are enrolled in the Oregon Health Plan for two years even after a change in eligibility status. 

The ‘churn’ population

The state has long dealt with a so-called “churn population” that goes on and off Medicaid, depending on their income. During the pandemic, states received extra money from the federal government to keep people covered  even if their financial situation changed, but that provision will end when the Biden administration declares an end to the public health emergency. The government has renewed it every three months since January 2020. It is now due to expire in mid-October.

Keeping people covered cuts down on administrative work, ensures better care and lowers overall costs, Brown said. People who lack health insurance often go to emergency rooms for treatment. Emergency care is among the most expensive, and relying on ERs means patients often don’t get treatment until their conditions worsen. Preventive care, a hallmark of Oregon’s Medicaid system, helps keep people healthier and catches issues before they become acute.

The agreement, as part of the state’s waiver from traditional Medicaid requirements, aims to provide housing and food support to low-income people with special needs, defined as those between 19 and 26 who have a serious chronic condition, emotional problem or a diagnosed disability. The expanded coverage is also aimed at young people leaving foster care, at risk of entering foster care or those aging out of foster care. Most people in foster care are on their own at age 18. 

The state estimates that 140,000 will be eligible for housing, food and other social benefits when those are added in 2024.

The social services help will also be extended to people upon their release from state or tribal custody, those who are homeless or at risk of becoming homeless and seniors aged at least 65 who are low-income and because of their age qualify for Medicare, the health insurance system for the elderly. 

The agreement will provide periodic physical, mental and dental screenings under age 21 as well.

The expanded coverage is part of Brown’s push to eliminate health inequities by 2030. Nearly all children have health insurance in Oregon, and nearly 95% of adults are covered. 

“It’s clear that we must look beyond a traditional, siloed approach to truly meet the needs of people, particularly those experiencing complex challenges,” Brown said. “Everyone – regardless of their race, age, income-level, gender, ZIP code or lack thereof – deserves access to quality, affordable health care.”

The health authority said the Oregon Health Plan will continue to provide coverage based on a prioritized list of services approved based on scientific evidence. The waiver also guarantees the state will cover all medically necessary and appropriate care required for treatment for children up to age 21 starting Jan. 1. By law, Medicaid is supposed to cover all medically necessary treatment but earlier this year, The Lund Report revealed the plan had suddenly denied a hormonal treatment a boy had received for years when he was a teenager. The treatment cost $20,000 a year.

Bridge plan

A state task force created by the Legislature in 2019 to devise a plan for universal health care coverage recently released its proposal which would provide generous physician, mental and dental care.

Patients would not pay for office visits or any other co-pays or co-insurance, and they would not have deductibles, which have to be met for coverage to begin. They also wouldn’t have to buy health insurance, and the state would do away with employer-based coverage.

The plan would be funded by more than $20 billion in new employer and personal income taxes. The task force, composed of state officials, medical experts and insurance company executives, recommended that the state oversee the program and that it include seniors on Medicare within the scope of federal law. Consumers would pay for services not covered by the plan.

Proponents say the plan would cost Oregon less overall because of the savings on health insurance and out-of-pocket costs for care. But critics have lined up against the proposal, saying the state overestimated the financial benefits and that the plan would cost Oregon more.

Some other states have pushed for universal coverage but none have adopted it. Massachusetts has come the closest. The state’s governor, Charlie Baker, was also on the conference call, announcing the adoption of a hospital initiative that is expected to improve the quality of care and reduce health disparities as part of its own Medicaid waiver.

Although the universal health care proposal is far from being adopted in Oregon, the state is expanding coverage on its own beyond Medicaid. This February, the Legislature approved a plan by the Oregon Health Authority to create a new insurance plan for low-income people who earn too much to qualify for Medicaid. The “bridge plan” would apply to individuals who earn about $2,800 a month or nearly $5,800 for a family of four. It will kick in when the federal health emergency ends and people are booted off from Medicaid for earning too much. 

The state estimates that about 300,000 would qualify for the bridge plan.

That coverage and the Medicaid waiver will get Oregon closer to its goal of statewide coverage.

“We are one step closer to ensuring that everyone in Oregon has access to the health care they need, when they need it,” Brown said.

CORRECTION: The state estimates the new coverage will cost Oregon nearly $500 million from the general fund through June 30, 2027. A previous version of this story stated it was nearly $500,000.