SALEM - Federal officials notified Gov. John Kitzhaber that the state has received federal approval to restructure and expand the Oregon Health Plan by up to 60,000 people at no increased cost to the state.

Approval by the federal Department of Health and Human Services is required because federal money pays for more than half the cost of the health plan. Federal action means that both the Medicaid program and the Family Health Insurance Assistance Program will be expanded.

The 2001 Oregon Legislature authorized this expansion of the health plan, called OHP 2, which currently covers more than 400,000 Oregonians.

"Oregon's ability to deliver health care to more Oregonians at no more direct cost to Oregon taxpayers is another example of this state's ability to find innovative ways to save money while still expanding services to needy Oregonians," Kitzhaber said.

The higher cost will be offset by a combination of increased premiums, co-pays for services and reduced benefits for low-income Oregonians who don't quality for traditional Medicaid but who are eligible for coverage under the Oregon Health Plan, which is currently about 108,000 people.

For the first time, low-income working Oregonians above the federal poverty level will be eligible for health plan coverage if they meet tests of income, assets and Oregon residency. The program will open initially to those up to 110 percent of the poverty level, with future expansion possible to 185 percent as funding allows. Eligibility for pregnant women and for children and teens under age 19 will rise from 170 percent of the federal poverty level to 185 percent. The program will be expanded Feb. 1, the ninth anniversary of the start of the Oregon Health Plan.

Under this restructuring, an "OHP Plus" benefit package will continue current benefits for enrollees entitled to benefits by age or disability or because they are pregnant, newborns, or children under age 19 with qualifying household incomes. An "OHP Standard" benefit package with reduced benefits and cost sharing resembling those in private insurance plans will cover all other plan participants.

Meanwhile, FHIAP will be expanded by up to 25,000 people beginning on Nov. 1. FHIAP, which supplements employer-sponsored and individual insurance for low-income Oregonians, will receive federal dollars for the first time. This will enable more people to be covered and for eligibility to extend to households earning up to 185 percent of the federal poverty level (from 170 percent currently). FHIAP now enrolls about 3,500 Oregonians.

Medicaid and FHIAP are administered by the Oregon Department of Human Services and the state Insurance Pool Governing Board, respectively.

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