Audit: State gave millions in erroneous benefits for health plan

A free Oregon health care program for adults who make too much money to qualify for Medicaid could have improperly given out $15 million in payments related to benefits for recipients, according to a recent audit of state-managed federal programs.

The “questioned” funds surfaced in an 124-page report this week by the Secretary of State’s Audits Division, which found the state spent $21.1 billion in federal funds from July 2024 to June 2025 across 433 programs. The agency zeroed in on 16 programs that accounted for nearly 70% of the total spending during that duration.

While most of the funding Oregon spent was in compliance with federal law, the state’s Basic Health Program, also known as the Oregon Health Plan Bridge, received an adverse opinion from the Secretary of State. That is the harshest response the agency can offer during an audit. 

“The State of Oregon takes our responsibility to be good stewards of tax dollars seriously,” Secretary of State Tobias Read said in a statement. “This audit will help agencies improve their administration of federal programs to ensure the state is efficiently spending public money to the best benefit of the public.”

The findings come as Oregon is under pressure from the GOP’s 2025 federal tax and spending law to reduce its error rate for determining eligibility for benefits, and as Oregon health officials seek to expand the health program. Democrats and benefit eligibility workers say the increased administrative burden of the law and its new work requirements will make it harder to accurately determine benefits for Oregonians.    

The Basic Health Program, run by the Oregon Health Authority, kicked off in 2024 and allows for Oregonians who have a household income over 133% and under 200% of the federal poverty level to access health coverage. That would be anywhere from $20,820 to $31,300 per year for a single individual, or from $42,768 to $64,300 for a family of four.

People who have access to affordable employer-backed insurance plans are not eligible for the service, which does not require co-pays, premiums or deductibles. Around 41,100 people have signed up and use the program’s services, according to a state dashboard, though the state is aiming to onboard a total of 100,000 people onto the program.

State auditors found that the state’s ONE eligibility system made coding errors when it came to determining the 133% income threshold, and that the system failed to cut off benefits for people when a “response to a request for information” suggested an individual was over the maximum 200% income threshold. Auditors recommended that the agency ensure the health program is refunded for the payments made for ineligible Oregonians and to ensure benefits are ended for them. The audit also suggested the agency continue to monitor the ONE eligibility system.

An Oregon Health Authority report after implementing the program in July 2024 found that Oregonians were receiving basic health program benefits despite having an annual income below that base threshold. The agency also noted that the threshold was “inadvertently removed” from system testing controls.

OHA responds, disputes some calculations

In response to the findings, the Oregon Health Authority issued a statement noting that it identified the errors raised prior to the audit, notified “our federal partners” and has since taken steps to resolve the issue. Franny White, a spokesperson for the agency, said the coding errors that caused the inaccurate determinations were fixed in June and that the agency has been working to ensure financial restitution will be made to the health plan’s trust fund.

“OHA and (Oregon Department of Human Services) determined that an error involving the ONE Eligibility System – a single, streamlined application through which the state determines if people are eligible for various benefits – resulted in inaccurate enrollment when some individuals earned too little to qualify for OHP Bridge,” White wrote in an email.

White said that both the Oregon Health Authority and the Oregon Department of Human Services have implemented manual changes to reduce instances of “incorrect enrollment” until a broader systemic fix can be implemented.

But tucked inside the agency’s response was some disagreement with the way auditors reached its final calculation of up to $15 million in “known and likely questioned costs.” The figure was split between two errors amounting to an estimated $8 and $7 million, and the health authority disputed that latter figure in its response.  

“As was communicated to the Secretary of State in the agency’s management response, OHA’s own analysis does not align with the Secretary of State’s questioned costs for this issue because those costs do not line up with the estimated number of members impacted or the length of time they were enrolled,” White said.

Individuals who have been impacted by the revealed errors are being transitioned to the Oregon Health Plan or the state’s health insurance marketplace, White said. She added that people can remain on the basic health plan if there are any changes allowing them to now meet the program’s eligibility requirements.

“The process for determining coverage eligibility is complex and occasionally results in some people being enrolled in the wrong program,” the agency said in a statement. “When this happens, OHA works diligently to identify the issue, determine which people are affected  and determine how to best correct the error.”

Two outlined plans for corrective action that state health officials are set to take in response to the audit are expected to conclude in February 2027 and December 2028.

Oregon Capital Chronicle is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Oregon Capital Chronicle maintains editorial independence. Contact Editor Julia Shumway for questions: info@oregoncapitalchronicle.com.