House approves $673 million Oregon Health Plan fix

The Oregon Health Plan is likely to survive another two years thanks to hospitals, insurance companies and a single Medford Republican.

On a 36-to-23 vote Thursday evening, the Oregon House approved a provider tax that will generate $673 million in 2017-2019. That will allow the state to maintain coverage for about 378,000 Oregonians who gained coverage under the Affordable Care Act.

The vote is also a major step toward closing the $1.4 billion shortfall in the upcoming budget and moves the Legislature closer to finishing its work by the July 10 deadline.

The measure, House Bill 2391, must still clear the Senate with all the Democrats and at least one Republican providing the three-fifths vote necessary on a revenue measure.

That appears likely because three Republican senators voted yes earlier this week to move the bill out of committee. They were Fred Girod, R-Stayton; Alan DeBoer, R-Ashland; and Jackie Winters, R-Salem.

The measure succeeded in the House because Rep. Sal Esquivel, R-Medford, voted with Democrats. Esquivel didn't speak to the bill or say why he crossed the aisle.

Republicans urged a no vote, largely because the Oregon Health Authority, which manages the Oregon Health Plan, has had problems with its computer infrastructure and verifying eligibility for health plan recipients. Republicans also have concerns about the handling of $19 billion in state and federal dollars that flow through its coffers.

"Right now," Rep. Julie Parrish, R-West Linn said, "that agency is accountable to no one."

Democrats said the bill was the result of a consensus, not only among lawmakers who crafted the bill, but also hospitals and insurers who worked on the proposal.

Under the measure, large hospitals will pay a 6 percent tax and small, rural hospitals a 4 percent tax. Much of the tax would later return to the hospitals in the form of payments for treating health plan patients. And this is key: The increase in state spending would trigger a match of as much as $1.9 billion from the federal Medicaid program in the coming biennium.

"This is a small cost to bear so that people in this state can have health care," Rep. Rob Nosse, D-Portland said.

The vote was accompanied by some political high jinks. The vote was moved to Friday then returned to Thursday in a matter of hours. House Speaker Tina Kotek barred the chamber doors until the matter was decided. Republicans delayed proceedings to caucus then attempted a procedural maneuver that could have upset the hospital provider deal.

Five things to know about the Medicaid fix

  1. The proposed tax on hospitals and insurers would produce an additional $673 million for the Oregon Health Plan in the 2017-2019 budget cycle.
  2. The Oregon Health Plan is part of the federal Medicaid program, which is a state-federal partnership, and the new state taxes would leverage about $1.9 billion in federal matching funds.
  3. The Oregon Health Plan covers one out of four Oregonians.
  4. Total state hospital taxes would be 6 percent of net patient revenue for the state’s 28 largest hospitals and 4 percent for 32 small, rural hospitals.
  5. Insurers and managed-care organizations would pay a new 1.5 percent tax on premium income.

© 2017 KGW-TV


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