Oregon Emphatic on Expanding Medicaid

Unlike other states, there was never any doubt Oregon would opt to expand its Medicaid program for lower-income Oregonians.While some states have debated whether to expand Medicaid as part of implementation of the federal Affordable Care Act, Oregon appears not even to have considered the possibility of saying no.

Led by an activist governor, John Kitzhaber, Oregon has proceeded as if health care reform was a foregone conclusion.  In fact, the governor, a former emergency room physician and one of the country's acknowledged health care policy experts, has taken action to put the state ahead of almost all others, contending there is no choice but to reform a system that could threaten to bankrupt the state budget.

Kitzhaber encouraged the state to develop an online health insurance shopping center before there were any federal rules on such health insurance exchanges. He proposed a new approach to delivering health care to Medicaid recipients through "coordinated care organizations" and prodded the legislature to go along with him. In the new budget Kitzhaber unveiled for 2013-15, he continued moving down the road aggressively toward reform.

Lawmakers, even with a nearly even split between Democrats and Republicans in the 2011 legislative session, went along with the governor in large numbers. The vote on the underpinning of reform, Senate Bill 1580, passed on a party line vote in the Senate, but cleared the House by a wide margin, 53 to 7.

Few legislators went on record with statements in opposition to reform, though a couple Republican voices in the Senate asked whether the state wanted to get linked up with Obamacare when so little was known about long-range costs.

Last week, one Republican said he was concerned that the governor had included Medicaid expansion population in his Oregon Health Plan budget recommendation, exposing the state to unfunded costs down the road.

Meanwhile, other states have moved more slowly than Oregon. An Associated Press story this week reported several governors have resisted submitting to the federal directives.

"It's health care brinksmanship, with hundreds of billions of dollars and the well-being of millions of people at stake," one state health care official said. "President Barack Obama's health care law expands Medicaid, the federal-state health program for low-income people, but states must decide whether to take the deal. Turn it down and governors risk coming off as callous toward their neediest residents. Not the mention the likely second-guessing for walking away from a pot of federal dollars estimated at nearly $1 trillion over a decade."

Virginia's health secretary said, "The state does not want to get stuck with the bill. Our legislators do not like to raise taxes to pay for a benefit someone else has promised."

Negotiations in Washington, D.C. over the fiscal cliff underline concern in some states about the "fiscal solvency and ability of the federal government to meet its commitment."

Here's the way the Medicaid expansion would work.

       *  On January 1, 2014, Medicaid will be expanded to cover people earning up to 138 percent of the federal poverty line, which translates to about $15,400 a year for an individual.

       *  Most of these new beneficiaries are expected to be childless couples, but some proportion would be parents with children at home.

       *  The federal government would pay the first three years of the expansion, but gradually would phase down the support to 90 percent, leaving the 10 percent for states to pick up. 

Legislative attention to health care issues in the 2013 session will be challenged with pressing issues such as reform to the Public Employees Retirement System, K-12 education, prison sentencing and paying for a new I-5 bridge over the Columbia River.

A funding deal for the Oregon Health Plan negotiated by the governor with major private health care leaders could set the stage for quicker and less divisive action than in previous sessions when health care was the last major general fund category to be approved. Despite the complexity and future risk, lawmakers in Salem may find health care funding and Medicaid expansion to be one of the easier decisions they have to make.