By DON McINTOSH, Associate Editor

For several months, six citizen committees have been hammering out a complicated plan to provide health insurance to uninsured Oregonians — all 600,000 of them.

Organized labor is well represented on the committees, which were authorized by the June 2007 passage of Senate Bill 329 by the Oregon Legislature. Governor Ted Kulongoski appointed the committee spots in October. SB 329, known as the Healthy Oregon Act, was sponsored by state senators Ben Westlund (D-Tupelo) and Alan Bates (D-Ashland).

The committees are supposed to make their recommendations public by the end of April, kicking off months of community meetings. Then a seven-member Oregon Health Fund Board will listen to public input and sift through the committee proposals to make a final recommendation to the Legislature in October 2008. The Legislature will take it up in January when its 2009 session begins. And it’s likely that Oregon voters will be asked to approve the result. If all goes according to plan, Oregon could have something like universal health coverage as of 2010.

But a great many details of how the program will work are still up in the air.

In its most basic form, the Oregon Health Fund envisioned by SB 329 will require all uninsured Oregonians to purchase insurance on something like an income-based sliding scale — and require all employers to contribute something to cover the costs. The poorest Oregonians would have their insurance paid for entirely, while the moderately low-income would get a subsidy of some kind. And middle- and upper-income individuals would be able to buy insurance at rates more affordable than they are now. Insurers would not be allowed to deny coverage based on pre-existing health conditions.

That’s the basic plan. But the Oregon Health Fund also has ambitions to be a kind of big-idea system-wide reform. SB 329 aims to restructure the way health care is delivered and paid for in Oregon so that the $20 billion or so now spent annually on health care in the state could be used more efficiently and effectively.

It’s a reform that has the potential to create big-time winners and losers. The job of the Oregon Health Fund Board will be to make sure all parties win and lose a little, or else the political backlash may kill the project before it gets off the ground.

The Oregon Health Fund Board will oversee the process and select from among the recommendations of the six committees and several task forces that are developing different parts of the proposal. The committee members aren’t paid, but are assisted by a paid staff of eight number-crunchers and policy analysts overseen by Barney Speight, a widely-respected health policy expert and former Kaiser Permanente vice president.

Oregon AFL-CIO President Tom Chamberlain is labor’s representative on the Board, which also has representatives from business and community groups. The union movement also has representatives on most of the committees, and the labor folks all work together and meet periodically to coordinate.

Unions have a big stake in health care reform, both because they defend the interests of working people in general and because they’re having to fight hard to hold on to the health benefits that union employers provide. And as much as 10 to 15 percent of premiums may be going to paying the cost of care for uninsured individuals who can’t pay their bill. If Oregon can figure out a way to insure everyone, premiums for union-negotiated health coverage could go down.

In the SB 329 process, one of the most important, and contentious, committees has been the Finance Committee, which is supposed to figure out a way to pay for the plan, even though no one is sure how much it will cost. Ballpark estimates are that covering the currently uninsured would cost $550 million a year. Money for the Oregon Health Fund would come from a number of sources.

“Everybody’s going to pay,” said Maribeth Healey, executive director of the union-supported non-profit Oregonians for Health Security. “Individuals will pay, businesses will pay, government will pay. It has to be fair.”

For starters, Oregon will be able to use the money it’s already getting from federal programs for poor individuals (Medicaid) and children in low-income households (SCHIPS).

But how much of the remaining cost should be borne by employers, and how much by individuals, is a big debate on the committee. Employers would probably pay by means of a payroll tax. Employers that provide health coverage would get a rebate of most or all of the payroll tax. From the union perspective, that could be a boon, because union employers sometimes are undercut by competitors that don’t provide health care benefits.

On the 18-member Finance Committee, the union voices are Operating Engineers Local 701 stationary coordinator Cherry Harris and Lynn-Marie Crider of Service Employees (SEIU) Local 49, and they’re working to restrain the profiteers. That’s because depending on how it’s formulated, the Oregon Health Fund’s biggest beneficiaries could end up being hospitals and insurers.

Hospitals are mostly non-profit, and much of the justification for that status comes from the so-called charity care they provide — basically care to uninsured individuals who don’t end up paying their bills. If all Oregonians are insured, then there are no unpaid bills, and thus a windfall to providers that Crider says could be in the range of $400 million a year. If the Oregon Health Fund could figure out a way to reclaim even two-thirds of that money through a tax on health care providers, it would go a long way to pay for the program. The challenge would be coming up with a way to prevent them from passing on the tax in the form of higher prices.

Meanwhile, having 600,000 new insurance customers could mean a windfall for insurers. So Harris and Crider want to cap insurance profits and administrative costs. Harris says others on the committee have argued there are no profits in the system when insurers like Regence Blue Cross Blue Shield are non-profit organizations. Harris scoffs at that. She said the Finance Committee held one meeting at Regence’s Portland office, on the 18th floor of its downtown building. Harris sat at a mahogany table in a leather chair, her coffee cup on a leather coaster, the room trimmed in cherry wood and leather and floored with oriental carpet.

Crider sits on a Finance subcommittee, the Exchange Work Group, which is fleshing out plans for an entity through which individuals and businesses could purchase affordable insurance. The Exchange could be as little as a consumer information Web site enabling individuals and businesses to compare competing plans from private insurers. Or it could be a negotiating tool, aggregating the buying power of hundreds of thousands of participants to bargain a very affordable price from the insurance companies. It could even be a regulatory body, capping insurance profits and administrative expenses and requiring insurers to get approval before they could increase premiums. But the question of who could buy through the Exchange has still to be determined. If the Finance Committee can’t reach consensus, Crider said, it might end up forwarding a menu of options to the Oregon Health Fund Board.

Meanwhile, the 19-member Delivery Systems Committee has three labor voices: Diane Lovell of Oregon AFSCME, Stefan Ostrach of the Teamsters, and Healey, of Oregonians for Health Security, who co-chairs the committee. The Delivery Systems Committee is looking at how to pay health care providers (mainly hospitals, physicians, and dentists), and how to get the most bang for the buck. It’s also supposed to come up with a way to control cost increases. Without cost control, the whole program could quickly become unaffordable. SB 329 lays out a specific mandate that costs of the program not increase by more than the general cost-of-living index. If the Oregon Health Fund achieves that, that alone would be an accomplishment, since medical inflation has for years been triple the inflation rate of other parts of the economy.

The Eligibility and Enrollment Committee, on which SEIU Local 49 Political Director Felisa Hagins serves, is working out the subsidy structure that will enable the health coverage to be affordable. For example, the plan might offer a health insurance tax credit to individuals earning up to three or four times the poverty level, with the goal of limiting insurance costs to 5 percent of an individual’s income.

Susan King, head of the Oregon Nurses Association, chairs the Benefits Committee, which is looking at what constitutes the set of “essential health services” that would be required for all health plans offered through the program. At a minimum, the plans will include some level of dental, vision, mental health and prescription drug coverage, preventive care, chronic disease management and short hospital stays. But it might not include catastrophic care or expensive end-of-life care. The benefit structure will likely have features designed to minimize cost to the program, like zero co-pays for primary or preventive care, and higher co-pays for brand-name drugs that are no better than cheaper alternatives. Nothing would prevent individuals or employers from purchasing additional coverage above the minimum level.

The Federal Laws Committee will figure out what if any waivers Oregon will need to change the way federal monies are used, and which federal laws might need to be modified, such as ERISA (Employee Retirement Income Security Act), which governs union health trusts. The Health Equities Committee will try to come up with ways to assure that health services are delivered in a fair way. Labor has no representatives on those two committees.

In May and June, the Oregon Health Fund Board will hold a series of 13 community meetings across the state to listen to public input on the broad concepts of health care reform.

The first meeting will be held Thursday, May 1, at Multnomah County East Building, 600 NE 8th St., Gresham.