The Oregon Health Plan a ‘Bold Experiment’ that Failed

Abstract

The Oregon Health Plan has been called a “bold experiment” designed to expand health insurance to Oregon’s low- income residents. It sought simultaneously to expand coverage, control costs, and foster provider participation. However, like the experimental drug that performs no better than a placebo, the Oregon Health Plan has produced results that are not significantly different from the outcomes seen by the U.S. as a whole. Over the life of the plan, the share of uninsured in Oregon has not been significantly different from the rest of the U.S. for any sustained period of time. Similarly, over time, Oregon’s share of the population covered by Medicaid is virtually no different from the rest of the U.S. Data presented by the state tended to overstate the number of uninsured prior to implementation of the Oregon Health Plan and to understate the number of uninsured after the plan was rolled out, thereby inflating the plan’s early success in expanding coverage. Total Medicaid expenditures and Medicaid expenditures per enrollee have closely tracked U.S. expenditures, an indication that the Oregon Health Plan has not been any more or less successful than the U.S. as a whole in controlling costs. Initial hopes for broad participation by providers have been dashed by the pullout of larger managed care providers and a shrinking pool of providers willing to accept Oregon Health Plan enrollees as new patients.

Keywords: Oregon, Medicaid, rationing, health insurance, health care

JEL Classification: H51, H53, H72