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News Release

HHS APPROVES OREGON REQUEST
TO EXPAND HEALTH INSURANCE COVERAGE TO 60,000 PEOPLE

HHS Secretary Tommy G. Thompson today announced the approval of Oregon's request to expand health insurance coverage to an estimated 60,000 residents without health insurance under the Administration's Health Insurance Flexibility and Accountability (HIFA) Initiative.

"This approval means health coverage for thousands of uninsured Oregonians - including many uninsured parents whose children are already covered," Secretary Thompson said. "By giving states like Oregon greater flexibility in their Medicaid and SCHIP programs, we are creating new opportunities for low-income residents to obtain the health coverage that they need."

Under the waiver, Oregon expects to add an additional 60,000 individuals who currently do not have insurance to the 380,000 already covered under the Oregon Health Plan. The state will use State Children's Health Insurance Program (SCHIP) and Medicaid funds to expand health insurance coverage to pregnant women and children and to parents of Medicaid and SCHIP enrollees, childless adults and individuals currently covered by the state's premium assistance program up to 185 percent of the federal poverty level (FPL). The federal poverty level is $18,100 for a family of four. Coverage will be phased-in over the five-year period of the demonstration project.

The new, restructured Medicaid demonstration, Oregon Health Plan 2 (OHP2), will have three distinct benefit packages: OHP Plus, OHP Standard and the Family Health Insurance Assistance Program (FHIAP). OHP Plus will include those in the "mandatory" population (who are entitled to coverage by law) and certain optional populations including pregnant women and children with incomes up to 185 percent of FPL. Participants will be offered an enriched Medicaid benefit package and will be required to make nominal copayments. Those eligible for OHP Plus will also have the option of choosing the employer-sponsored premium assistance program.

OHP Standard will include parents of children enrolled in SCHIP and Medicaid as well as childless couples and other adults with incomes up to 185 percent of FPL. The OHP Standard benefit package will be the actuarial equivalent of the federal Medicaid benefit package. Copayments and premiums will vary depending upon service and income levels. Individuals will be required to enroll in employer-sponsored insurance (with premium assistance) if it is available to them.

The employer assistance program will be offered to those eligible for the other categories of coverage with incomes up to 185 percent of FPL, including children in the Medicaid and SCHIP programs and the other eligible groups. Individuals will receive a slightly smaller benefit package than the other two options, but one that must meet or exceed the state's benchmark benefit package. Those in the premium assistance program will pay premiums and copayments based on income. Participants must also pay 25 percent cost sharing on prescription drugs with no out-of-pocket maximum and an annual deductible of $500 per enrollee.

HIFA is a Medicaid and SCHIP waiver approach recently developed by the Bush Administration that gives states greater ability to design health insurance programs to meet the health insurance needs of their low-income populations.

"We are continuing to work with states to ensure that maintaining and expanding coverage for children is the top priority for SCHIP," said Tom Scully, administrator for HHS' Centers for Medicare & Medicaid Services (CMS). "We also hope states will use the new waiver opportunity to expand health coverage to low-income adults who otherwise would not be eligible."

Secretary Thompson launched the new HIFA initiative last year to encourage states to expand access to health care coverage for low-income individuals through Medicaid and SCHIP demonstrations. The initiative gives states more flexibility to coordinate these companion programs and offers a simpler application for states that commit to reducing the number of people without health insurance. HIFA also encourages coordination between public and private coverage options for the uninsured.

As former governors, President Bush and Secretary Thompson have made it a priority to make it simpler and easier for governors to submit Medicaid and SCHIP waiver requests and to have those requests considered promptly. Since January 2001, HHS has approved waivers and plan amendments that have expanded eligibility to more than 2 million people and enhanced benefits for more than 6 million people.

More information about the HIFA initiative, including an online template that states can use to submit applications, is available at www.cms.gov/media/.

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Note: All HHS press releases, fact sheets and other press materials are available at www.hhs.gov/news.

Last Revised: October 15, 2002