SB 889 Containing healthcare costs

VOTE: NO – Signed into Law by Gov Brown

Status (overview) of bill:https://olis.leg.state.or.us/liz/2019R1/Measures/Overview/SB889

Fiscal Responsibility
The program overlap what DCBS (Insurance Division) does in analyzing all health premiums sold in this state. They already have actuary staff that have most of this data that would only take one person to establish and review benchmarks. This bill is about growing government with a new program that OHA estimates the fiscal impact to be $993,797 General Fund and 6 positions for the 2019-21 biennium; and $2,074,040 total funds [$1,854,850 General Fund and $219,190 Federal Funds] and 8 positions for the 2021-23 biennium. And that doesn’t include any enforcement that is sure to be added down the road.

Limited Government
Senate Bill 419 (2017) established the Task Force on Health Care Cost Review to study the feasibility of creating a hospital rate-setting process in Oregon modeled on the process used by the Health Service Cost Review Commission in Maryland. The Task Force’s final report concluded that the Maryland model was not appropriate for Oregon and instead recommended that Oregon develop a plan to control total health care expenditures across all payers and providers by establishing a health care spending benchmark. The Task Force specifically recommended moving forward with a model similar to the approach taken by Massachusetts. SB 889 adopts the Task Force on Health Care Cost Review’s recommendation to implement a health care cost growth benchmark program to help control health care cost expenditures across all payers and providers in Oregon.

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SB 889 establishes the Health Care Cost Growth Benchmark program that is unnecessary and misplaced under the Oregon Health Policy Board.

The program overlaps what DCBS (Insurance Division) does in analyzing all health premiums sold in this state. They already have actuary staff that have most of this data that would only take one person to establish and review benchmarks. They know the trends in healthcare costs and what the insurers face in the pricing.

This bill is about growing government with a new program that OHA estimates the fiscal impact to be $993,797 General Fund and 6 positions for the 2019-21 biennium; and growing to $2,074,040 total funds [$1,854,850 General Fund and $219,190 Federal Funds] and 8 positions for the 2021-23 biennium. All this expense is unnecessary and ill directed to put it under OHA.

Benchmark is merely a word to help control trends, but healthcare costs are driven by usage. Benchmarks will do nothing to control costs that is already being done by actuaries in DCBS reviewing premiums rates and usage. It will have everything to do with increased costs to taxpayers.

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