Oregon Senate approves renewing tax to bolster state’s Medicaid program
House Bill 2010 now goes to Gov. Tina Kotek’s desk to await her signature.
The bill raises and extends a pair of taxes on hospitals and health insurers, which the state uses to bolster federal funding for the Oregon Health Plan, the state’s Medicaid program that provides health care to low-income individuals and those with disabilities.
The bill also extends the state’s funding arrangement with
The bill passed the
The taxes are a 2% assessment on health insurance plans and managed care organizations and a 6% assessment on hospitals’ net revenue. The taxes are expected to raise
Like most states, Oregon’s Medicaid program is funded by a mix of state and federal funds, including the assessments on hospitals and insurance providers. The federal government funds the majority of the state’s Medicaid spending. According to Georgetown University’s
The hospitals support the taxes because they unlock billions in federal matching dollars. The hospitals essentially recoup the money back in the form of larger reimbursements for the care they provide to low-income Oregonians, and it reduces the amount care provided to people without insurance that goes uncompensated.
Health insurance companies and coordinated care organizations also back the tax, though it ultimately leads to higher premiums for businesses Oregonians. That money generated from the tax is used to help insurers offset high-cost claims, and some of it goes to fund the state’s Medicaid program.
The tax on hospitals in
“Without action, we risk losing billions in federal funding … and leave a significant shortfall on the state’s Medicaid system,” Sen.
The state would have to allocate money from the general fund to support the Medicaid program, which would’ve put pressure on the state’s budget. Hospitals would also see lower reimbursements for providing care to those on Oregon Health Plan.
Sen.
Bonham, who voted against the bill, said that gives bigger employers an advantage over smaller ones that typically get insurance coverage for their employees through the state’s small group insurance marketplace, where plans are subject to the tax. HB 2010, Bonham said, “creates a doom loop death spiral for the small group market,” as the number of people participating in those state-regulated health plans have declined and a small group of people have to shoulder these insurance premium taxes.
Meanwhile, the
No one knows how much those federal cuts to Medicaid would impact
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