SALEM — No matter what the U.S. Supreme Court decides about the future of the federal health care law, Gov. John Kitzhaber’s ambitious Medicaid overhaul will go forward, state officials said Monday.
But if the court throws out the entire federal law — not just the most controversial parts — officials said the ruling could jeopardize a new health insurance exchange, a marketplace where individuals and small business can shop for coverage starting in 2014.
The Supreme Court is expected to rule this month on the constitutionality of the federal health law’s individual mandate requiring everyone to have health insurance or pay a fine.
State officials say the ruling will have only a minimal impact on Kitzhaber’s plan to create new coordinated care organizations to manage the care of low-income patients on the Oregon Health Plan. The first coordinated care organizations begin operating Aug. 1, and Kitzhaber hopes they’ll slow the growth of health care costs by preventing avoidable hospital visits and reducing waste.
“Whatever happens, we’re still moving full steam ahead, and we feel like this is going to be essential regardless of the outcome” at the Supreme Court, said Mike Bonetto, Kitzhaber’s health policy adviser.
Federal health officials have tentatively agreed to give Oregon $1.9 billion over the next five years to help pay for the transition to the new model of delivering health care. That money would be unaffected by the Supreme Court’s decision, officials insist, because it is authorized under federal laws that predate President Barack Obama’s 2010 health law.
The court’s impact on a separate Kitzhaber health care initiative is less clear. The Oregon Health Insurance Exchange will provide a place for small employers, along with individuals who don’t get health coverage from a job, to compare plans and shop for coverage. The federal law will give many lower-income Americans a subsidy to help pay for coverage.
If the Supreme Court strikes down the entire federal law, the decision would wipe out more than $60 million in grants that are paying for the development of the exchange. The loss of federal funding would make it very difficult to keep the exchange alive, director Rocky King said.
However, if the court slices up the health care law, throwing out the individual mandate and related provisions but leaving alone the rest of the law, the exchange can still work, King said. But prices would probably be higher, he said.
“As long as the subsidy money is there, I can still get enough enrollments to make the exchange work very well,” King said.