EDITORIAL: Health insurance savings could help heal the state

April 07--A legislative proposal to move the state's public employees' health care into coordinated care organizations makes sense on multiple levels: It would save hundreds of millions of dollars at a time when Oregon's institutions are facing massive cutbacks, it would enroll public employees in a system that focuses on total health and it could do so without a major hit to the public employees' pocketbooks.

The author of House Bill 3428, Rep. Julie Parrish, R-West Linn, says the bill could save nearly $1 billion per biennium. That's hard to quantify, but even if it were half that amount, there seem few other places where that kind of savings could be realized. And, lest some consider this another attack on public employees by a conservative lawmaker, consider that she came up with that estimate from statements made by former Democratic Gov. John Kitzhaber in 2013 (and that Parrish is considered one of the more moderate members of her caucus).

More evidence comes from the state's universities, which estimated they could save $100 million per biennium if they were allowed to participate in the CCOs. As Parrish notes, "... imagine what the savings would have been over four years had 197 school districts, 19 educational service districts and 17 community colleges been afforded the ability to buy their insurance through the Exchange."

The proposal also comes on the heels of a Sunday Eugene Register-Guard story reporting that Oregon pays far more for health insurance for its employees than either Washington or California. The annual average cost for public employees in Oregon is $16,992 per year, compared with $12,312 in Washington and $15,500 in California. The average portion of their health insurance paid by the employee in Oregon is 5 percent. In Washington it's 15 percent and in California 23 percent.

There is a related bill in the Legislature that should be paired with this: House Bill 2122 would require that CCOs become nonprofit by 2023. As is evidenced locally by the enormous profits -- $11.3 million last year -- reaped by the private AllCare CCO primarily in Jackson and Josephine counties, allowing the CCOs to remain private would have a significant drag on health care savings.

Legislators have focused in recent sessions on ways to get around the huge financial burden of the Public Employees Retirement System payments. But the courts have made it clear legislators can expect few if any victories in that arena. The state's annual health insurance bill of $1.7 billion, however, actually exceeds the PERS expense.

Looming in the midst of the discussion is the eventual likely demise of the Affordable Care Act and the state exchanges that provide insurance. Parrish notes, however, that the CCO system, which was established to manage Medicare, would remain and already has proven its worth in curbing costs.

Public employee unions, generally intent on preserving the comfortable status quo, likely will object. Will the Democrat-controlled Legislature and governor's office fend them off and do what's right, if this pencils out as advertised? If they want to protect the public services that could be funded by the savings, they will.

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