National Association of Counties
Washington, D.C.

 Oregon law requires private insurers to cover pre-trial jail inmates


By Charles Taylor


A recent legislative victory for Oregon counties could offer a blueprint for counties in other states seeking to reduce spending on jail inmates’ health care and repurpose those dollars.

House Bill 4110, which the Oregon Legislature unanimously approved last month, requires private insurance companies to continue to cover insured inmates being held pre-trial — those who have been “charged with” but not “convicted of” a crime. Historically, county taxpayers ultimately footed the bill for inmate medical care when insurers suspended or canceled coverage of pre-adjudicated inmates.

For counties large and small, it could mean big savings. Claudia Black, Multnomah County’s co-director of government relations, who lobbied hard for the change over two consecutive legislative sessions, said that a statewide survey estimated that, on average, 8 percent to 9 percent of pre-trial inmates have private health insurance coverage in Oregon. That figure could rise to as high 30 percent since the Affordable Care Act’s insurance mandate took effect this year.

“It’s going to save us at least half-a-million dollars the first year,” she said. That’s money that can be used not just on jails but to meet other county human services needs to serve vulnerable populations.

In smaller Umatilla County (pop. 76,000) on the other side of the state, Commissioner Bill Elfering said jail inmate medical expenses are currently “a little bit south of $700,000” a year, including pre-trial and convicted inmates (the county’s annual general fund budget is about $60 million). Conservatively applying Black’s estimate of 8 percent pre-adjudicated inmates would yield savings of almost $60,000 a year.

“It means quite a bit of savings and money that we can utilize to strengthen our sheriff’s department in another way,” Elfering said, “either the jail operation or the patrol operation of the Sheriff’s Department.” This is no small issue in Oregon, where Columbia County is on the brink of shuttering its jail over budget issues, and Curry County faces severe sheriff’s department cutbacks.

H.B. 4110 states that “an insurer offering a health benefit plan may not deny reimbursement for any service or supply covered by the plan or cancel coverage of an insured under the plan on the basis that … the insured is in custody pending the disposition of charges….”

Lawmakers relied on an opinion from the state’s Legislative Counsel, which provides legal advice to the Legislature, that denying coverage would violate the ACA. A National Council of State Legislatures spokesman said he was unaware of any legislation similar to Oregon’s in any other states.

The opinion is based largely on the ACA’s “guaranteed issue” and “shared responsibility payment” provisions. In part, guaranteed issue requires any insurer offering coverage in a state to accept every individual that applies for coverage.

Shared responsibility payments imposes penalties — or shared responsibility payments in ACA parlance — on individuals who do not maintain “minimum essential coverage,” including plans offered through the individual market.

In its opinion, Oregon’s Legislative Counsel wrote that, “There are a number of categories of taxpayers who are exempt from the shared responsibility payment…. However, an inmate who is incarcerated … prior to conviction, is not exempt from the shared responsibility payment.”

Section 1312(f)(1)(B) of the ACA, which pertains to insurance exchanges, states that “an individual shall not be treated as a qualified individual, if at the time of enrollment; the individual is incarcerated, other than incarceration pending disposition of charges.”

The law also has some built-in protections for insurers, such as preserving their ability to drop an insured person who doesn’t pay premiums, and they can still do utilization review, Black said.

A similar measure failed during the Oregon Legislature’s 2013 session. Ashley Horne, an AOC lobbyist, said one difference this year was the overwhelming support of urban and rural counties. “This time there was shared understanding among legislators and county commissioners around messaging and why this issue is so important; people looked at their budgets and realized that counties were using taxpayer dollars to pay for health care services that should have been covered by the private insurers.”

She said Multnomah County’s Black played a pivotal role in pushing the legislation through; however, there was widespread support within AOC. “Most of the counties in Oregon are not Multnomah County (in size and clout), and all counties voted in support of this bill within our AOC legislative process of considering issues and taking a vote,” she said.

“I know just from visiting with a number of legislators that commissioners did call their representatives and senators about this issue, and that did help move the dial.”

Sheriff Rick Eiesland of rural Wasco County (pop. 25,500) knows firsthand how problematic jail health care costs can be. He recounted the experience of having a murder suspect in his jail for several years, awaiting trial after a series of delays. The inmate needed surgery to remove a “small tumor in his head.” The tumor was surgically removed, and within a week of the inmate returning to jail, he died of a heart attack in his cell. “We ended up with a bill for about $300,000,” Eiesland said.

“There’s other instances throughout the state where people are on dialysis and they had insurance and they’re paying the premium, but when they go into jail, the insurance company says, ‘no, they’re incarcerated; they’re your problem,’ and they refused to pay.”

Black said the Oregon law could certainly serve as a model for other states. “It’s definitely doable; we’ve broken the ice,” she said, “and I think other people ought to consider it, too.”