Brown signs funding package to pay down Medicaid debt

SALEM, Ore. (AP) – Oregon will pay off half of its Medicaid debt through new taxes on health care providers.

Gov. Kate Brown on Wednesday signed a bill that includes a six-year tax on hospitals and insurance plans to help fund the state’s $950 million Medicaid shortfall. The move is expected to bring in over $430 million.

The state has been struggling to keep up with Medicaid funding after a drop in federal contributions. The governor hopes to make up the rest of the money through a tax on tobacco and e-cigarettes. She’s also exploring a tax on employers who don’t provide workers affordable health care coverage.

Legislative budget leaders say that without new revenue, Oregon will have to fill the rest of the approximate $450 million funding gap through its general fund.

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News release from Gov. Kate Brown’s office:

Governor Brown Signs Health Care Funding Bill Bill provides more than $400 million in funding for Medicaid, reinsurance program

(Salem, OR) — Today, Governor Kate Brown signed House Bill 2010 into law. The bill is the first piece of her priority legislative proposal for sustainable, long-term health care funding to ensure Oregonians have access to affordable health coverage.

“House Bill 2010 is a significant step forward in ensuring every single Oregon has access to affordable health coverage,” said Governor Brown. “But HB 2010 only covers a portion of what we need for our health care system. So, as we celebrate today, we need to immediately turn our focus to filling the rest of the Oregon Health Plan funding gap.”

House Bill 2010 includes:

A hospital assessment, generating $98 million for the Oregon Health Plan (Oregon’s Medicaid program) A health insurance assessment and managed care tax, generating $334 million for the Oregon Health Plan and the Oregon Reinsurance Program, which helps stabilize insurance rates for individuals who buy coverage through the private market

To provide the rest of the needed funding, Governor Brown has proposed an $2-per-pack increase in the cigarette tax, a tax on e-cigarettes, and the creation of an assessment on employers that do not provide affordable coverage to their workers.

“Securing this funding package will ensure Oregonians continue to get the health care coverage they need to thrive and will enable a balanced budget for the Oregon Health Plan for the next six years,” Governor Brown said.