Saturday, January 3, 2015

What Oregon legislators were (and were not) thinking when they passed the insurance exchange

The Oregonian recently ran a story on Michael Cannon and his crusade to screw over the middle class in states that didn't set up their own health insurance exchange.  His challenge to the tax credits people receive now relies on the premise that his understanding of the law is the only possible rational interpretation.  If the law is only ambiguous then he has no case

Given that, I wanted to see what Oregon legislators were thinking when they enacted SB99 which created Oregon's exchange.  Did they understand that they were enabling Oregonians to receive tax credits?  The following quotes from Senators and Representatives are from discussions preceding the votes.  Transcriptions and any errors are mine, as is the emphasis.
Senate vote on 4/25/11 (SB99 discussion starts at 17:00 mark). 

Senator Morse
… as we all know, the federal patient protection and affordable care act was passed in 2010, which mandates the implementation of state based insurance exchanges by January 1, 2014.  In the event states do not implement an exchange the federal government will do it for them.

Senator Monnes Anderson 
if Oregon does not develop its own health exchange, insurance exchange, the federal government will create one.  This legislation is our own plan that takes our states' specific needs into account with a consumer driven mission and local control. The health insurance exchange will give Oregonians more health care options, a greater number of affordable plans, and more information about which one will best meet their needs.

Senator Kruse
When we went at this proposal, we made it very clear on the front end that regardless of what happened at the federal level we wanted to create something that would work for Oregon, and that has been our intent all the way through on this is to make something that works for Oregon.  Now knowing full well that at some point in time the feds are gonna define a few things like what an exchange actually looks like from their perspective, what a basic benefit plan actually looks like from their perspective, but colleagues those are things that are undefined at this point in time.  It was incumbent on us to do something Oregon specific because quite honestly I don't want the federal government coming in and running things in the state of Oregon.  So this was our option.

Senator Bates
This act says that starting in 2014 every state has to have an exchange.  If the state doesn't do it the federal government will do it.  And we have some very special things in this state that other states don't have.  Managed care plans in Medicaid.  Different kinds of DCBS systems.  And if we don't have our own actual exchange put together we're going to have trouble making the federal one work and it's going to cost us a lot of money to make it work.  So we need to do this ourselves and we need to do it for Oregon and we need to do it fairly quickly...
...My biggest worry is this goes to the house and dies and we are stuck in 18 months to 24 months from now with a federal exchange that we can't make work in this state without us spending huge amounts of money, to put an IT program together, and to make it wedge into a system we have here in this state that's so unusual and actually more effective.

House vote on 6/17/11 (SB99 discussion starts at 2:43:50 mark).

Representative Thompson
Congress provided funds for early adopters, and indicated that if no action was taken by a state to create the exchange, the federal government would create and operate the exchange on behalf of the state.

Representative Cannon
The choice we have today is whether to allow the bureaucrats in the Hubert Humphrey building in Washington to design a health insurance exchange or to put Oregonians to work designing a health insurance exchange that works for Oregonians.  That's the issue.  By adopting SB99, we don't know precisely what this exchange will look like, it's several years from being operational, but at least we'll give ourselves the chance to move forward with an Oregon solution to the national problem of health care and affordability and accessibility.

Representative Thompson (speaking a second time)
...We also know that in January of 2013 the feds are going to move in and do an exchange.  This is not a question of whether or not we have an exchange, whether you like it or not.  It's in the federal law that that's what's going to happen.  They have the right to do that in January and we don't even meet in our long session until February to do anything additionally about this.  So the stakes are relatively high.  The issues of tax credits and navigators and what not are not really germane to this discussion.  That's in the federal legislation.  We're going to get all of that when the feds come in and do their plan for us.  I wish I could wave the magic wand and give a tax credit to anybody who buys insurance anywhere for their employees.  We can't do that.  But the feds did do it.  And they set it up with rules.  We can tuck those rules into our bill and use them, in our plan, or not.  But it's in the federal legislation and your vote today doesn't affect whether or not certain individuals will get tax credits for using an exchange or not.  They're going to get the tax credit because the federal will take precedence over ours if we don't do anything.

A total of 13 Senators and Representatives spoke before the votes.  None of them suggested they thought this would impact tax credits.  Two supporters of the law, one a Democrat and the other a Republican, talked explicitly about what would happen if Oregon didn't build an exchange.  If anyone was going to talk about the impact on tax credits, they would.  What they said speaks for itself.

I think this proves that as a factual matter, neither Republicans nor Democrats in the Oregon legislature held Michael Cannon's interpretation of the ACA.  And to accept Cannon's case, it isn't enough to say they just had different interpretations.  One has to say that the Oregon legislature, both Republicans and Democrats, held to an irrational interpretation of the ACA.

In a comment under the Oregonian story, Steve Buckstein describes a meeting months after these votes where Cannon tried to get Oregon legislators to reject building their own exchange even though this would deprive residents of tax credits.  There are some problems with that story (the timing makes no sense), but if it's even half right I think it says a lot about Michael Cannon.  He sought to strip Oregonians of tax credits, and as a consequence access to health care, in order to score political points for the Republican Party.  Think about that for a second.

The Oregon legislature was wrong about a lot of things when it came to Cover Oregon.  But as wrong as they were, I trust them a hell of a lot more than I trust someone like Michael Cannon.

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