When the Oregon Health Plan was enacted in 1989, it was hailed as an innovative approach to expanding Medicaid to more people by rationing services. But today the plan is “covering both fewer services and fewer people, and the elimination of entire benefit categories and rollback in enrolled beneficiaries looks more like the arbitrary cuts common in other states than the rational and equitable model of prioritization to which Oregon aspired,” says Jonathan Oberlander in a new Health Affairs article.
In analyzing what went wrong, Oberlander says that Oregon failed to anticipate how price-sensitive OHP enrollees were and how much difficulty they would have navigating the system, which represents “a cautionary tale for states enamored with consumerism and the prospect of having Medicaid recipients put more ‘skin in the game’ through added cost sharing.” He also details how OHP became fiscally unstable and lost its political support.
The most important lesson of the Oregon experience for other states “is that the task is not simply to enact coverage expansions--it is to sustain them,” according to Oberlander. He suggests that the strongest challenge to sustainability is increasing medical costs, which leads to a Catch-22: Avoiding cost controls, and thus avoiding fights with medical industry stakeholders, “is perhaps the key to short-term political success.” However, the absence of cost control “may be, in the long run, the Achilles’ heel of state-led health reforms.”
