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Proposal for an Oregon medical insurance plan

I wrote this in February, after the defeat of Measure 30, for the Health Care For All - Oregon email list. HCAO sponsored the single-payer universal health care initiative Measure 30 in 2002.
Proposal for an Oregon Insurance Plan

What does the defeat of Measure 30 mean for the future of any initiative in Oregon which would expand medical insurance coverage to the uninsured? The most obvious message is that any proposal to raise the taxes of most people will be dead on arrival.

But there is another message about taxes to be found in the elections of the last several years: People will vote for taxes that OTHER PEOPLE WILL PAY. Oregonians have twice voted to increase cigarette taxes, paid by an unpopular minority, to help finance the Oregon Health Plan. (Although that just went down the tubes, whether the voters knew it or not, with Measure 30.) Oregonians have also twice voted to increase the minimum wage, not a tax but the same principle applies. People in this state do have a rudimentary social conscience, as long as it doesn't cost them anything.

So one way to finance extended medical insurance is to stick it to a minority of the voters. The obvious candidate is employers. I suggest a small tax on employers, as a cost of doing business in this state. We could sell it on the same principle as unemployment insurance, a way of covering medical insurance for the unemployed and those whose employers do not provide medical insurance. Employers would fight it on the same basis they fought the minimum wage raises - "this will cost jobs" - but that argument, so far, has not worked with the voters. Unless it was a factor in the defeat of Measure 30, but I don't think so. I don't think voters put much stock in indirect effects arguments. Too abstract. If it doesn't affect them personally, immediately, it's not real.

As a second finance source, I suggest premiums to be paid by those in the program, with the amount of the premium based on income. (Free for those with extremely low incomes.) With a generous grace period, unlike the present Oregon Health Plan, so we're not kicking people off for slow payment. Advantages of this are:
It's not a tax.
It breaks the connection, at least for those in the program, between having a job and getting medical insurance.
It will sound good to the voters. "Personal responsibility" and all that.

For purposes of discussion, let's call this the Oregon Insurance Plan - OIP.

We could sell this as a voluntary government run medical insurance program for those who are uninsured or underinsured. It would be open to anyone but would not be imposed on anyone. So people who have adequate insurance through their jobs would not have to join or pay taxes to support it. Therefore it shouldn't be threatening to the unions. Or perhaps even the insurance companies, although it would be a possible competitor. If we're going to talk about experimenting with setting up a privatized program to compete with the present Medicare, why not do the reverse and set up a government program to compete with the insurance companies? Actually we might only be competing for the people the insurance companies don't want to insure, or insure adequately. And for those in it, at least, this would be a single payer program. If all the studies about saving money with single payer are right, it seems we ought to be able to work out the numbers so it would fly.

I would not try to incorporate Medicare in this program, as we did with Measure 23, because:
We would have to get a federal waiver to do it, and that always seemed doubtful to me.
It would strike a lot of people as very radical, and might sink the proposal.
We would be accused of "trying to take over Medicare."
Medicare is a federal program and I think it's funding is safer than anything run at the state level. It has its own dedicated fund.
Medicare has a clear identity in the public mind and a national constituency. It needs a lot of improvement but there is also a lot of pressure to do that. I just think it's best to leave well enough alone.

However, our plan could serve as supplemental insurance for those on Medicare who choose to join. Again, it's voluntary, we're not forcing anything on anyone.

As with Measure 23, we could try to incorporate the Oregon Health Plan into OIP in order to get the federal matching funds for those clients eligible for Medicaid.

We would need a rule that if you have any kind of medical insurance, that pays before OIP pays.

Others who could join OIP would be the self-employed and people who have insurance through their jobs but it's inadequate. All these groups together - unemployed, self-employed, working but not insured, underinsured, Medicare supplemental - should give OIP a significant constituency, which the plan would need to be politically viable, and a large premium pool.

It's not single payer universal health care for the whole state, but it would be a significant step in that direction with potential for expansion, would solve the problem of the uninsured and underinsured at an affordable cost, and might be politically salable.

Any initiative needs to be simple, something you can explain in a few sentences, both for getting signatures and for the campaign to pass it. I think Measure 23 was too complicated. So was Measure 30. Activists tend to forget that most people don't understand very much, if anything, about politics. Here is the simple explanation for OIP:

"This is an initiative to set up a state medical insurance program to cover everyone who is uninsured or underinsured. It will be voluntary - people can join if they want to. It will be financed by a small tax on employers and premiums paid by those on the plan."

I would have it run by a state agency under the control of the governor. I think Measure 23's plan to have it run by a public nonprofit with an elected board was too complicated and hard to understand. Keep it simple and close to what people are used to.

Its funding needs to be dedicated to the plan so the state legislature, unless it changes the law, cannot move funds to other programs. I think if this passed it would be hard for the legislature to get a majority vote to reduce its funding.

It would be very important to get the numbers right. We don't want that to be an issue like it was last time. And the numbers must work when Oregon is in a recession, as it is now. If we could get a state senator or representative to work with us on this, perhaps we could get the help of the state Legislative Revenue Office in getting the numbers right.

Perhaps we could base costs per person on what OHP cost per person, before the legislature cut benefits.

There should be some reasonable restriction on treatments covered, perhaps similar to what good commercial insurance excludes. It should be similar to the coverage most people get who have insurance through their jobs, so that we don't run into the envy problem.

I would exclude long-term care, leave that to Medicaid, because it would add so much to the cost of the program.

The state legislature, in its last session, passed a bill to set up a Prescription Drug Purchasing Pool to reduce drug costs to those in the pool. Perhaps OIP members could be added to that pool.
Sounds like a good plan 04.May.2004 06:29

James

I'd prefer a voucher to a government administered plan. But providing health care to the unemployed should be a priority.

Sounds good, but some suggestions 04.May.2004 13:34

politics as impossible

This is a good discussion. But what is needed is the actual wording for an initiative. Ultimately, we are forced to work with the legislative process (Salem), including such institutions as the Democratic Party, (not to mention the obstructionist Republican Party), but an initiative is definitely called for here. However, we have to learn from previous failures and also we have to think outside the box.

If you stick it to employers, you assure a lot of paid TV to defeat your initiative. I think the key is the sales tax, dedicated to medical insurance. No one has yet exploited the fact that people who pay the sin-taxes are pissed. So, a part of the proposal has to be that all the current sin-taxes (booze, cigarettes) are removed, based on the concept that a sales tax includes them, but equitably with all other taxed goods. (Should I say "goods" taxed equitably with "evils"?) Anyway, that would make signature gathering easy -- put petitions wherever cigarettes are sold. Also, this way everybody pays, even transients, tourists, street people, homeless people. So voters will like that, because they hate the idea of free-loaders. Also, whatever would be covered in the sales-tax-financed plan could still be provided by the 10,000 (private and public) plans, but those plans could be reimbursed equitably - which would mean that those plans would no longer have to keep increasing their premiums. So, you wouldn't be voting to pay for your health plan at work plus to pay for other people who don't have any health plan at work. This would take the pressure off employer-provided plans: employers would be for it ! How this would relate to federal employees and retirees, and to the V.A. --- these are more complex problems. But not everything needs to be spelled out in excruciating detail (as with the OHP initiative), just take on the big problem -- how to pay for it -- and the 10,000 little problems of implementation can be dealt with later. The initiative can be short and sweet, not requiring a week to try to read it and understand it.

True, a lot would depend on the legislature, and everyone is convinced that the legislature will sell them out --- and it will, until people take a greater and more informed and enlightened interest in state politics. But, without that shift, everything is impossible anyway. Panaceas by direct democracy are false promises --- the world is too complicated, Oregon isn't a small Swiss canton. Anything we do must depend upon getting something passed in an initiative FOLLOWED UP with action in the legislature, carefully monitored by citizen groups. I know, you are going to tell me how corrupt the legislative process is in a capitalist world --- I am "politics as impossible" and I've heard it all before --- the reality remains that there is no way around the process of representative government, short of the the mythological capital-R Revolution, and even then something like a legislature always re-occurs. You want the U.S. to be like Canada --- Canadians take provincial (as well as national) legislative politics very seriously. Canadians do not say that since "politicians" are corrupt and we live in a capitalist world, therefore public financing of medical care is impossible. They bite the bullet and do what it takes to put responsible people into their legislatures and make them accountable.

Yes, sales tax is a regressive tax, but sometimes we have to "rise above" our principles (as opposed to sinking under them) in order to get anything done. Actually, the world being what it is, there is nothing but choices among evils. You don't like it, but you can get real to get something done, or you can live in your idealistic dream-world and accomplish nothing as you wait for the bloody revolution, after (but not a day before) which the public will experience mass epiphany and enlightenment. The thing is, with a sales tax dedicated to medical care, the pressure can be taken off the general fund. Uninsured Oregonians, people covered by existing health plans, small employers, public employees, smokers and drinkers -- it's called building a coalition.

Having no relation to the discussion about the OHP, we need to distinguish commercial and industrial property from residential property. Anything along those lines will encounter a huge anti-fact campaign of TV crap, but still it does qualify as taxing somebody else other than the average home-owner/voter. So, that could be, and must be, a part of any comprehensive solution to the underlying problem --- which is the growing disparity of economic means between the owning class and the various layers of the "working" class.

I think it is VERY important not to try to do things with huge complex initiatives like the OHP thing that failed miserably. The details simply have to be left to the legislature. That's just reality; but groups drawing up initiatives tend to be so anti-legislature that they forget reality --- and go down in flaming glory.

Just suggestions.

Taxes 04.May.2004 23:17

Lynn Porter oregonactivist@mail.com

On this particular issue I am interested in politics as possible. The question is, what is possible? I don't believe any increase in individual income taxes is possible. The sales tax, I'm told, is steeply regressive (hard on low-income people) no matter how many exemptions you make for necessities like food and shelter. And I understand it has been rejected many times by Oregonians. I just don't think it would fly.

I'm also told -- this from a tax workshop -- that the tax burden in Oregon has been shifted from business towards individuals, and that a lot of money could be reclaimed by eliminating business tax breaks. If so, that would be another way of raising money for expanded medical insurance. Whether that is politically possible or not I don't know, but my political gut tells me it might be, although it would take an initiative to do it. Yes business would run TV ads against it, but do voters really care what business thinks as long as most of the voters don't have to pay anything? Judging from the two votes each for taxing cigarettes for the Oregon Health Plan and raising the minimum wage, I don't think so.

I still think the plan I outlined above would be the most politically possible. It would take an initiative to do it. HCAO found a legislator to introduce Measure 23 as legislation, but it never got out of committee. I doubt that something like what I'm proposing would either.

Initiatives are a really big job to do. HCAO's Measure 23 made it on the ballot because a small number of people practically lived on the street getting signatures. You really need some kind of large, state-wide coalition and preferably two dry seasons. Some money wouldn't hurt.

And we need something we can sell. But first you have to get agreement on that. Where to begin?

HCAO is planning to do another single-payer universal healthcare initiative in 2006. I wish them luck and would vote for it, but I probably won't work for it because I don't think it has any chance of passing unless things get a whole lot worse -- skyhigh premiums, big paycheck deductions. So I think we should try something more doable. The goal is to get everyone covered at a price they can afford.