State officials, experts: Supreme Court case on health insurance subsidies won't affect Oregon

Oregon's health insurance marketplace is a state-based exchange and would not be affected by the U.S. Supreme Court case against president Barack Obama's health care law, state officials say.

The Supreme Court heard arguments in the case Wednesday. The lawsuit seeks to limit financial assistance to people who live in states that created their own health insurance marketplaces.

Oregon built its own exchange, Cover Oregon, but it never fully launched. Last spring, the state ditched its exchange and switched to the federal portal HealthCare.gov for all 2015 health insurance eligibility and enrollment.

If successful, the lawsuit would upend federal tax credits for low-and middle-income people in some three dozen states that rely on HealthCare.gov. Independent studies estimate that could cause 8 million people to lose insurance coverage, because they no longer will be able to afford it.

Officials say Oregonians' subsidies are safe, because the state has retained many functions of a state-run exchange. Oregon still contracts with health insurance carriers and certifies plans, and it takes care of all outreach, marketing and consumer assistance, including running a call center.

"We are a state exchange," Cover Oregon spokeswoman Amy Fauver said. "The federal government considers us a state exchange and our legislature has reaffirmed this status."

The status of Oregon as a state insurance marketplace is enshrined in statute, Fauver said.

It was reaffirmed in a bill that dissolves Cover Oregon — sent to Gov. Kate Brown last week. The measure moves the exchange's remaining state functions to the Department of Consumer & Business Services.

Approximately 74,000 Oregonians received financial assistance in 2014 to purchase private health insurance plans through Cover Oregon, state figures show. That's about 80 percent of the total 93,000 enrolled.

As of Feb. 15, more than 110,000 Oregonians had selected plans via HealthCare.Gov, according to the U.S. Department of Health and Human Services. More than 85,000 people qualified for financial assistance. Their average tax credit: $203 per month.

Experts agreed with state officials' assessment on the safety of Oregon's subsidies. Nevada and New Mexico also use HealthCare.Gov but have exchanges that were approved as "federally supported, state-based marketplaces."

All three states are doing everything required of a state marketplace, except for handling eligibility and enrollment, said Larry Levitt, an expert on health insurance markets at the nonpartisan Kaiser Family Foundation.

If the court rules for the challengers and upends subsidies, Oregon, Nevada and New Mexico could even become models for moving forward, Levitt said. Those states affected by the ruling could set up their own marketplaces but continue using HealthCare.Gov for eligibility and enrollment, he said.

Because insurance pools don't cross state lines, Oregon would see no other impacts — even if the individual insurance market were to melt down in other states, Levitt said. But a court ruling upending subsidies could unleash a debate in Congress about the health care law's future, and that could have unpredictable consequences, he added.

The Supreme Court likely will not rule until late June.