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Measure 101 victory doesn't end Medicaid funding woes

Oregon Health Plan faces shortfalls in 2020 as federal share shrinks and parts of current funding package expire.

FILE PHOTO - The Legislature faces a looming shortfall in health care funding, despite the passage last week of Measure 101.PORTLAND — Last week's special election was not the end of Oregon's Medicaid funding debate.

On Jan. 23, Oregon voters approved Measure 101, which contained a slate of taxes on insurers and health care providers to help the state fund the program, which covers low-income people and other qualifying groups.

But due to the temporary nature of the taxes and shrinking federal financial support, state policymakers could in a year face other significant funding hurdles for the program — to the tune of more than $1 billion.

Medicaid is jointly funded by the state and federal government and covers just under a million Oregonians. It's known here as the Oregon Health Plan.

But Measure 101 isn't a permanent funding solution.

Certain provisions in the law are set to expire in the next few years. At the same time the federal government is reducing its financial support for certain OHP patients.

Oregon collects refundable and nonrefundable assessments from health care providers and insurers that are used to get matching dollars from the federal government to pay for the Oregon Health Plan.

Before those parts of the law expire, legislators must extend them, find another revenue source to make up the difference, or make cuts to the program.

Those pieces of the funding law account for nearly $1.3 billion. That would have to get addressed in the long legislative session in 2019, when legislators must hammer out the 2019-2021 budget, according to the Legislative Fiscal Office.

And then there's the shrinking share of costs covered by the federal government.

The federal Patient Protection and Affordable Care Act allowed states increase income limits to expand eligibility for Medicaid.

The feds initially paid the entire cost of patients added under the expansion. But that subsidy drops to 90 percent in 2020, creating what could be an approximately $169 million gap, according to LFO, depending on how many patients are enrolled under the expanded guidelines.

State Rep. Cedric Hayden, R-Fall Creek, argues that the state should pay for Medicaid in a different way, and is urging the formation of a task force to study ways to fund Medicaid for the long term.

"We need a task force now, in 2018, to figure it out by 2019, so we are ready by 2020," Hayden said Tuesday.

Hayden was one of the petitioners who, along with State Reps. Julie Parrish, R-Tualatin/West Linn and Sal Esquivel, R-Medford, brought Measure 101 before voters in an effort to partially repeal the funding plan.

Hayden and Parrish have suggested that the law be amended to expand the types of providers that can be taxed as a way to bring in more revenue. At present, some providers, such as ambulatory surgical centers, are exempt from the "provider taxes" that help pay for the Oregon Health Plan.

Meanwhile, Rep. Mitch Greenlick, D-Portland, who leads a health care policy committee at the Legislature, is promoting a ballot measure to ask voters whether the state's constitution should be amended to include the basic right to health care.

It's not yet clear how coverage for every Oregonian would be guaranteed or paid for, and whether the state would be responsible for those costs.