State-based health insurance exchange would protect access to coverage

Gov. Tina Kotek recently signed Senate Bill 972, which will enable Oregon to transition from the federal health insurance marketplace to a state-based exchange, a move that could lead to wider health insurance coverage and contain premium growth.

A state-based exchange is the lynchpin that could bring together Oregon's broad spectrum of health care priorities. It would give state officials the flexibility to better serve disparate populations, reach underserved communities, improve access to behavioral health services, lower uninsured rates and save on administrative costs.

With her signature, Kotek is following through on her campaign promise to ensure every Oregonian has access to affordable health care. The launch of a state-based exchange could help increase enrollment and keep costs under the state's control.

Every state participates in a health care marketplace where residents can shop for an affordable plan. In some states, the federal government runs the exchange, while others have a hybrid model. The District of Columbia and 18 states have chosen state-based exchanges over the federal marketplace, including Nevada, where I served as the exchange's executive director and saw firsthand the advantages of making this transition. Of the many benefits I witnessed, the ability to run our system autonomously was most impactful, allowing us to implement state policies that were best for Nevadans - such as state-specific special enrollment periods. The same can be done for Oregonians.

Last year, about 150,000 people in Oregon signed up for health plans through the federal exchange. Switching to a state exchange could increase that number and at a time when the state is ending Medicaid coverage for people who no longer qualify for the free insurance.

State-based exchanges better enable outreach and enrollment efforts to target underserved populations. Whereas on the federal exchange, the approach often reflects a one-size-fits-all approach, state-based exchanges have been used across the country to target specific geographic, economic and demographic profiles, due in large part to increased access to state-specific data. States operating a state-based exchange also routinely invest in education campaigns and provide local assistance to help individuals and small businesses understand their options, apply for subsidies and enroll in suitable health plans. This localized support is particularly important for underserved groups that are often hard to reach.

Now that the COVID-19 health emergency has ended, along with enhanced federal funding, Oregon must fight to preserve the enrollment gains health officials achieved over the last several years. In 2022, the percentage of residents with health insurance coverage grew to an impressive 95.4%, outpacing the national average by over 3%. However, without careful stewardship, widespread health care coverage losses may occur.

To fight against coverage losses, the implementation of a state-based exchange could be especially helpful in assisting Kotek's efforts to protect women's health care in Oregon. Currently, more than 87,000 women in the state lack health care coverage - an uninsured rate of 7%. Transitioning to a state-based exchange could be critical to further bringing down those rates by enabling the state to run campaigns and programs specifically geared towards pushing that rate down.

To sustain coverage levels, the state would need flexibility to tailor policies, subsidies and programs that only a state-based exchange can offer. Transitioning to a state-based exchange would likely lower operating costs which could help stem growth of monthly premiums. For example, states that run their own exchanges are more successful at containing premium growth and limiting increases due to strategies they take to stabilize markets. Additionally, state-based exchanges consistently provide more insurer competition, which has been shown to lead to premium reductions and lower premium growth over time. Similar research has shown that states with their own health care marketplaces have up to 20% lower premiums than states on the federal system.

These lower premiums are also due to the fact that a state-based exchange allows a state to design and manage its own health insurance marketplace, taking into account the specific needs and demographics of its residents. Local control enables the state to customize the marketplace to address the unique health care challenges faced by its population. States with their own exchanges can also implement more robust regulation and oversight mechanisms. By having greater control over plan standards and operating costs, they can ensure that health plans offered through the exchange provide sufficient coverage at reasonable prices.

While there is no shortage of pressing health care challenges, an expedited move to a state-based exchange would truly make health insurance more accessible and affordable. The transition positions the state and its residents to embark on a new health care future, one run by and for Oregon.