Oregon’s Health Exchange Law Gets a B-

There’s room for improvement as Oregon builds its new health insurance marketplace.

OSPIRG

Oregon’s health insurance exchange has opportunities to do more to help consumers and small businesses hit with high health care costs, according to Making the Grade, a new report released by consumer group OSPIRG.

The report comes as a mid-term grade of sorts, with many states having just recently passed laws to establish exchanges, but with time to improve before the new competitive health insurance marketplaces go live in 2014. 

“Oregon got a head start on the exchange, and began work to put one in place long before the federal health law passed,” said Laura Etherton, OSPIRG heath care advocate. “Now it’s time to make sure Oregon’s exchange is ready to deliver better value for consumers and businesses.”

The report closely examines the state laws passed to establish state exchanges set up so far and rates them on four key areas:  How accountable and transparent the exchange will be to the consumers and businesses that rely on it, how it can negotiate for lower premiums and better quality, how easy it will be for consumers and business owners to use, and how stable it will be over time.

“Not all exchanges are created equal,” continued Etherton “The report compares state exchanges according to the criteria that will matter most to consumers, including whether the exchange will be protected from insurance industry influence, and if it will negotiate with insurers for better rates.”

Oregon’s exchange earned a B- on the report’s scorecard. Weak points in the current exchange law include:

• Oregon’s exchange law failed to give it clear instructions to leverage the buying power of consumers and small businesses to negotiate with insurers for higher-value, more affordable coverage.

• Oregon’s law allows two seats on the exchange board to be filled by health insurance companies and other industry representatives with conflicts of interest.

• The exchange is not yet sufficiently protected against the risk of “adverse selection”, in which it covers only less-healthy enrollees and premiums rise unsustainably.          

“Oregonians face unsustainably rising costs on health care,” said Etherton, “Now’s the time to strengthen Oregon’s exchange so it’s stable, accountable, and allows consumers and small businesses to join together to negotiate a better deal on quality coverage.”