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Ballot Measure # 101 Healthcare Provider Assessments

Official Title: Approves temporary assessments to fund health care for low-income individuals and families, and to stabilize health insurance premiums. Temporary assessments on insurance companies, some hospitals, and other providers of insurance or health care coverage. Insurers may not increase rates on health insurance premiums by more than 1.5% as a result of these assessments.You can find more information on the League of Women Voters of Oregon website at VOTEResources. Referendum: Ballot Measure 101 is a veto (repeal) referendum. A veto referendum is a citizen-initiated measure addressing a law that the state legislature and governor approved. Certifying a veto referendum for the ballot requires signatures equivalent to 4% of the votes cast in the most recent gubernatorial election. This veto referendum was placed on the ballot with 70,230 valid signatures.Financial Impact: HB 2391 will produce an additional $673 million for the Oregon Health Plan (Medicaid) in the 2017-2019 budget cycle through state medical fund transfers and new assessments.Although there is no direct financial effect on local government revenues, there may be an indeterminate effect on local government expenditures related to increases in associated insurance assessments. There is likely to be an indirect and indeterminate effect on the state economy and local government revenues and expenditures.If the measure is defeated, there will be a reduction of $210-$320 million in state revenue, resulting in possible reduction of $630-$960 million in federal matching funds.Probable results of a YES VOTE: A “Yes” vote allows House Bill 2391 to go into effect in its entirety as enacted by the 2017 Oregon Legislature. It upholds specified assessments on health insurance companies, managed care organizations, the Public Employees’ Benefit Board, and some hospitals. These assessments will provide Oregon’s non-federal portion of funding for the Oregon Health Plan. Insurance companies cannot increase premiums by more than 1.5% as a result of the assessments.Probable results of a NO VOTE: A “No” vote rejects temporary assessments on health insurance companies, managed care organizations, the Public Employees’ Benefit Board, and some hospitals. Defeating ballot measure 101 will remove funding for House Bill 2391.See the Proposal section below for details.Background: The Oregon Health Plan (OHP)—Oregon’s Medicaid program—covers about a million people, including low-income children, seniors and people with disabilities.In 2014 the federal government’s Affordable Care Act provided federal funds to Oregon and other states to expand Medicaid coverage. As of 2017, this resulted in OHP providing coverage to 350,000 previously uninsured low-income Oregonians. Medicaid expansion includes adults not covered by an employer’s plan who earn up to 138% of the federal poverty level. Initially, the federal government paid 100% of these expansion costs. However, starting in 2017, Oregon was required to pay 5% of the expansion costs in order to release federal funds or cover the Medicaid Expansion coverage. Oregon’s required percentage contribution will increase in 2018 to 6%, 7% in 2019, and its share will be capped at 10% in 2020 and beyond.By the end of 2016 there was a $1.6 billion budget shortfall for Oregon’s mandated programs. Starting in January 2017, the Oregon Legislature worked with stakeholders on HB 2391 to fund the Oregon Health Plan for another 2 years to ensure that this shortfall did not cause approximately 350,000 Oregonians to lose insurance. It was signed into law on July 3rd, 2017, passed by a three-fifths majority vote (Senate: 20 to 10, House 36 to 23).HB 2391 funds the state’s cost sharing obligation by imposing temporary (two-year) additional assessments on hospitals and health insurance companies. (Since the Medicaid healthcare provider organizations are the primary beneficiaries of federal Medicaid funding, such assessments are used in 49 states to fund health care. Oregon has used similar assessments since 2003; prior to 2014, an assessment on insurers funded Oregon’s Healthy Kids Program.)Part of the revenues will be used as “reinsurance” for individual policy insurers, as a backstop for extraordinarily large claims. The intention is that individual market insurers will be able to lower their premiums. If this measure passes, the assessments on some hospitals will be approved, subject to the approval date by the Centers for Medicare and Medicaid Services (CMS) of the federal Department of Health and Human Services.Approval of Ballot Measure 101 will retain HB 2391 in its entirety, including the five contested sections summarized below:SECTION 3The Public Employees’ Benefit Board shall pay a 1.5% assessment on the gross amount of premiums equivalents received during the calendar quarter. (A “Premium equivalent” means a claim for reimbursement of the cost of a health care item or service provided to an eligible employee or family member, other than a dental or vision care item or service, and the administrative costs associated with the claim.)SECTION 5An insurer shall pay a 1.5% assessment of the gross amount of premiums earned by the insurer during that calendar quarter that were derived from health benefit plans delivered or issued for delivery in Oregon.SECTION 8Insurers may increase their premium rate on policies or certificates that are subject to the assessment (Section 5 above) by 1.5%. and increase its rates up to 1.5%, and may include a notice in its billings.SECTION 9A managed care organization shall pay a 1.5% assessment of the gross amount of premium equivalents received during that calendar quarter.SECTION 27In addition to existing assessments, a 0.7% assessment is imposed on the net revenue of each hospital in Oregon that is not a waivered hospital (such as public hospitals).Proposal: Ballot Measure 101 contests certain sections of HB 2391 as passed by the Legislative Assembly. A “yes” vote on Ballot Measure 101 would uphold HB 2391 and retain the assessments. A “no” vote would overturn sections 3, 5, 8, 9, and 27 of HB 2391. Removal of these sections eliminates the funding for HB 2391.
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