What Oregon's Universal Health Plan would actually do

What the plan would cover

Benefits are modeled on the plan Oregon's public employees have today, with broader mental health coverage added.

• Any qualified provider who takes the plan
• No restrictive networks
• No bills beyond what the plan pays

Whether doctors and hospitals would have to take the plan, or could choose, has not been decided.

Covered

• Hospital and emergencyInpatient care, surgery and ambulance rides
• Doctor visitsPrimary, specialty and preventive care, with screenings
• Prescription drugsIncluding specialty medications
• Mental healthSubstance use treatment and crisis services too
• Dental and visionPart of the core plan, not an add-on
• Maternity and familyNewborn, fertility and reproductive care
• Tests and equipmentLabs, imaging, rehabilitation, medical equipment
• End-of-life careHospice and palliative care

Limits worth knowing

• Long-term careNot included, unless you already qualify for it through Medicaid.
• Your first six months New enrollees get primary, behavioral health, emergency and medically necessary care right away. The full package, including planned (elective) outpatient procedures and fertility services, starts after six months of continuous coverage. The report does not say where dental, vision or prescriptions fall.
• Care outside Oregon Covered, but may come with some copays or deductibles, especially for non-emergency care.
• Copays The board is still weighing limited copays for some high-cost drugs and elective services.

If this is your coverage today

How you would sign up

1. Say Oregon is your home and you intend to stay. Basic coverage would start right away, and you could list your dependents at the same time. Planned procedures and some other benefits wait six months, as noted above.
2. Show proof within 60 days. Proof of where you live, such as a lease or a utility bill, plus your income and identity. The state would check its own records first.
3. Stay covered automatically. Filing an Oregon tax return, or already being in a state program such as the Oregon Health Plan or SNAP, would renew you. The board expects that to cover 90% to 95% of people with no action on their part.

How it would be paid for

The idea is to replace what households and employers already spend on premiums, deductibles and copays with new taxes. The report assumes existing federal and state health funding continues, which depends on federal waivers, and covers more than half the cost. That leaves $30 billion to $39 billion a year for new state taxes to raise.

• Employer payroll tax, 51 to 55%
• Household contribution, 40 to 43%
• Business taxes, about 5%

The five models

All five were set to raise the same money. They differ in who it comes from, and three choices drive the difference.

The names are ours; the board only numbers its models. Exemptions are shown for a family of four and equal 200% or 138% of the federal poverty level. "Tax filers" are Oregon resident tax returns. The two middle-fifth figures are average rates for the middle fifth of incomes: the household contribution alone, after any credit, and then with the employer payroll tax on their wages added. The board calls every figure here illustrative, not final.

Top rates are from the report's appendix, where all five models are set to raise the same money on 2022 tax data. The report's summary table lists lower figures for three of them, 7.69% to 12.05% in all: 12.0% for Model 1, from a 2032 projection that also raises the payroll tax to 9.89%, and 11.7% and 10.4% for Models 4 and 5, which appear to be the average rate paid by the top 1% and not the top rate. The board's own examples are consistent with 13.5% for Model 1 and 14.3% for Model 4. None of them reaches Model 5's top bracket, so its 12% rests on the appendix alone. Both documents are drafts. The one 2032 projection is sized to the board's own $30 billion estimate; if Milliman's $39 billion is closer, the taxes would have to raise about 30% more. our math

Counting the payroll tax too

The household contribution is only part of the picture. The board's appendix also adds the employer payroll tax on each group's wages, on the assumption that it comes out of pay. Counted that way, households are putting about 6% to 13.5% of income toward health care, in place of the premiums and other costs they and their employers pay now. The report says the models are "more progressive than current health care spending."

From Figure AFR4Fi of the appendix. The lowest fifth pays a higher combined rate than the second fifth in every model, which the appendix says means the models "are not progressive over the full range." Its explanation is that some large employers of low-wage workers do not cover many of them today and would now pay the tax on their wages. The lowest fifth also supplies less than half a percent of the money.

What would your household pay?

An estimate of your household contribution, the income-based tax that would replace premiums, under all five models. It uses the bracket schedules in the report's appendix. The payroll tax your employer would pay on your wages is shown beside each result for reference; it is not part of your bill.

The board's own examples

These four households come straight from the report, covering all five models. A marked cell means that household would pay less than it does today. The board's summary is that "the majority of people living in Oregon will pay the same amount or less." It calls its figures group averages and says more study is needed of who pays more.

A household of two, insured through a private employer with an $8.5 million payroll.

Today: $2,900 in premiums and $1,800 out of pocket. The employer pays another $16,700.

Yearly household cost, from Tables S1 to S4 of the draft report. Employer costs are not shown. In the private-employer example the employer's cost drops from $16,700 to $7,200 at an $85,000 income and rises to $18,000 at $220,000. The appendix adds that without the worker credit, most people covered by a public employer, and most single workers covered by a private one, would pay more than they do today.

If you run a business

The payroll tax is a share of payroll, not a price per employee. On the payroll tax alone, an employer comes out ahead only if what it spends on health benefits today is a bigger share of payroll than the tax. A private business with payroll under $500,000 owes nothing. Above that, each added dollar of payroll costs 9.6 cents (14 cents above $10 million in Models 2 to 5), and a business that offers no coverage today has nothing to offset it. Profitable companies would also pay the corporate tax add-ons described above, which this comparison leaves out.

What the documents do and do not say

• No cliff at $500,000 The rates are marginal by design, "to avoid fiscal cliffs." Crossing the line taxes only the payroll above it. The thresholds are meant to rise with inflation.
• Your workers' credit depends on your size In the models with a worker credit, employees get back half of the tax you paid on their wages. A small firm pays little or none, so its employees get little or no credit.
• Tax treatment The report says the payroll tax would be exempt from state and federal taxes the way employer health contributions are today. Federal treatment is not the state's to decide.
• Wages The report expects that replacing premiums with a payroll tax "will likely keep wages at a lower level because nothing will force wages up when the premium cost goes away." Whether an employer that saves money shares it is left to the employer.
• Not decided: what counts as payroll The report's examples count only wages. Nothing settles how owner draws, distributions or contractor payments are treated, and the appendix expects that without a worker credit both sides would have a reason to shift to contractor arrangements. The appendix intends the tax to be figured each pay period, not once a year, but does not say how the $500,000 is spread across pay periods; this calculator uses yearly totals. The board has not studied workers paid on a 1099.
• Not decided: multi-state and remote workers The report calls the $500,000 a "firmwide payroll threshold." It does not say whether payroll outside Oregon counts, or how the tax treats Oregon residents working elsewhere and people who live in one state and work in another.
• Not decided: which plan pays first If the state plan pays first and yours fills in around it, the report sees "possible disruption to benefits won through collective bargaining" and added legal risk under federal benefits law. If your plan pays first and the state plan wraps around it, less changes and less is saved.
• Not decided: insured plans versus self-funded ones Federal law shields self-funded plans from state rules. Plans bought from an insurer are different: the state regulates insurers, and the brief says the future role of that coverage "was not discussed by the Board."
• Not decided: when the tax starts The brief says lawmakers must decide when employer and household payments begin, how they apply to people not yet moved to the plan, and how to "minimize overlapping payment obligations" during a phased start. The thresholds, tiers and rates are themselves still open.

If you work in health care

The plan's cost savings depend on how providers are paid, so this is where much of the open work sits. One standard payment system would replace each insurer's own rates.

• Primary care Mostly a set payment per patient paid in advance, plus fees for some services, monthly payments for running the practice, and payments tied to quality. At least 15% of the plan's spending would go to primary care. That is a share of spending, not a rate for any one practice.
• Hospitals Mostly a fixed yearly budget covering about 70% of a hospital's payments, phased in over three to five years. It would also cover physician services at acute care hospitals. Critical access hospitals would get budgets too, which may be structured in line with Medicare's cost-based "reasonable cost" approach.
• Specialists and everyone else For specialists paid outside a hospital budget, behavioral health, oral health, pharmacy and others: not chosen. The report says the board "did not select detailed payment approaches for specialty care sectors."
• More, less or the same? Not determined. The report says it depends on "how the standardized fee schedule is structured and each provider's payer mix." It does not say what the standard rates would be tied to.
• The savings assume lower rates About 10% below what the plan would otherwise pay, on average. our math The reasoning is that providers would collect every dollar billed and need fewer billing staff hours, leaving them, in the report's words, "paid approximately the same as they are now" overall. It does not say how that would fall on practices that rely on commercial rates, or what happens to billing staff.
• Payment in full Providers who take the plan would accept its payment as payment in full and could not bill patients the difference. Whether taking the plan would be required has not been decided; the board has not discussed it.
• More patients, same workforce More insured people, pent-up demand and little or no cost sharing would mean more demand: $5.7 to $8.7 billion a year of added care in the estimates. The report flags staffing shortages and thin margins as a risk but does not estimate whether there are enough clinicians.
• Protections named, not designed The report mentions phasing in new rates, adjustments for "rural, safety net, or other vulnerable providers," and transition support for fragile ones. No rural or safety-net adjustment has been specified yet. The report expects that some providers and health systems "may resist" where standard rates or fixed budgets would cut their revenue.

If nothing changes

The open questions above are the plan's. The report sets them beside the costs of staying put: "Every path forward carries risk, including making no changes at all."

What the board says the plan would fix

• Coverage that stays putIt would not end when a job, income or eligibility changes.
• The same or less for most people With little or no cost sharing and no surprise bills. The report calls its figures group averages.
• Less paperwork for providers By staff estimates, 85% to 90% of the simplification could come even before federal programs join, if most employers move their workers onto the plan. How many would is unknown.
• One set of payment rules The same whatever a patient's coverage, with room to pay more where access is short, such as rural areas.

The statewide math

The report's headline is that Oregon could cover everyone for a little less than the current system would cost. That rests on resetting what providers are paid, which the plan would have the authority to do; the rates are not set. Here is how the numbers fit together. Figures marked our math are our own arithmetic on the report's tables, not numbers the board published. Both source documents are drafts, and the report says "all figures need outside vetting."

Yearly figures for 2032, with about 348,000 more people covered and little or no cost sharing. "Payments that would end" is our math: the current-system total less the public funding the report expects to continue, plus Part B premiums. The totals are statewide; some households and employers would pay more than today and others less. Both estimates assume provider payment rates are reset, as described below. Milliman also gives a high estimate for the plan of $86.5 billion; the report gives no matching high figure for the current system, and Milliman's high projections raise both.

How covering everyone could cost about the same

Covering more people with broader benefits costs more. The plan gets back to the current system's total by spending less on administration and billing, and by paying providers lower rates in exchange for full, reliable payment.

The last two savings, $7.8 billion together, depend on the plan setting payment rates about 10% below what it would otherwise pay providers. our math The reasoning: providers would collect every dollar billed and need less billing staff, so lower rates would leave them "paid approximately the same as they are now." The report adds: "If those renegotiations do not occur, these savings cannot be realized."

The size of the "dental, vision, hearing" and "administration" steps is our math: the plan's figure less the current system's. The report's current-system figure counts dental care but not what people spend today on vision, hearing aids or fertility care, so that step overstates the added cost. Steps may not add exactly because the report rounds each figure.

The published estimates, and what they depend on

The two published estimates put the plan about 1% to 9% below what the current system would cost in 2032. Both assume provider rates are reset. The last two rows are our own sensitivity check, not the board's: if rates were not reset, providers would in effect be paid about 10% more than today, and the plan would cost 2% to 9% more. our math

Milliman's rows are measured against a current system costing $78.3 billion. The board's rows assume slower cost growth for both the plan and the current system ($72.8 billion), so part of the gap between the two pairs is the growth rate, not the plan. The report calls the board's figure "roughly 8% lower"; $6.6 billion of $72.8 billion is 9%. The board's drug and fraud savings come from studies of national plans, and the report says a single state "would not be able to realize the savings of a national program." The board also lowered Milliman's administration estimate from 4.6% of spending to 3%. The report says members discussed that this "could be considered an ambitiously low estimate" and concluded it "is believed to be attainable."

What Oregon employers and households would pay

The new taxes are large because they replace spending of about the same size by employers, including public employers, and households. The totals match; who pays does not, and some households and employers would pay more than today. The report assumes federal and state health funding of $40 to $42 billion continues either way, which depends on federal waivers.

"Today" is our math: the report's current-system total less the public funding it expects to continue. The report's own summary adds the $3.5 billion of Part B premiums to the plan's side only, and shows the plan $2.9 billion above the current system. The board added them on purpose: the state would have to raise that money, and each $1 of Part B premium brings in about $3 of federal Medicare funding. It also says the topic "requires further evaluation." Medicare enrollees or their former employers pay those premiums today, so we count them on both sides, and the plan comes out about $0.6 billion lower on Milliman's estimate, the same gap the report shows before Part B. That is our reading; the report does not say whether its public-funding figure is already net of those premiums.

All figures come from Tables E2 to E11 of the draft report, for a plan fully running in 2032. They leave out start-up costs, about $21 billion in reserves, and long-term care.