Public officials, unions and hospital representatives debate pros and cons of health care tax.
A brief history: In 2014, the Affordable Care Act allowed Oregon to expand Medicaid, a program that serves the poorest Oregonians, with full funding from the federal government.
Starting in 2017, however, that funding dropped to 95%, and will drop another 5% this year. To fill the gap, lawmakers last session approved a 1.5% fee on insurers and .7% on some hospitals and coordinated care organizations.
The taxes account for about $320 million in revenue.
Oregon Democrats supported the funding package, but 33 out of 39 Republicans were opposed and eventually launched a petition to get Measure 101 on the ballot.
A “yes” vote keeps the existing taxes in place. A “no” vote eliminates the taxes.
From Left to Right: Adamson, Hagens, and Parrish debate Measure 101
During the City Club debate, the “yes” side was represented by Jessica Adamson, director of government affairs for Providence Health & Services in Oregon, and Felisa Hagens, political director for public employees union SEIU Local 49.
Adamson and Hagens argued the measure provides critical funding for Medicaid.
The “no” camp was represented by one of the architects of Measure 101, Rep. Julie Parrish (R-Tualatin). Parrish said Medicaid funding should come from other sources.
Supporters of the Measure chant "Yes on 101" outside the Sentinel Hotel
The two sides debated the following questions:
Who will be affected?
The “ACA Expansion population,” those added to Medicaid in 2014, includes some 350,000 Oregonians. Children and people with disabilities, Adamson noted, make up a large share of Medicaid recipients.
How much will it cost to cover those 350,000 Medicaid recipients?
Parrish said the taxes account for around $350 million, which wouldn’t be enough to cover 350,000 recipients.
Adamson and Hagens argued there are federal matching funds that would also disappear if the measure fails, and that together with these funds Measure 101 would allow the 350,000 recipients to keep their healthcare.
Fact-check: The Measure’s fiscal impact statement notes that a “no” vote would reduce state revenue by $210-$320 million. On top of that, the state would lose some federal government matching funds.
Is there enough money in Oregon’s general fund to cover the cost? Are there other ways to fund Medicaid?
“There is no Plan B,” Adamson said. “Anything else is a gamble,” Hagens said.
Parrish said the general fund could cover at least some of the Medicaid costs. “350,000 people do not lose their healthcare if we vote no. We have more revenue in Oregon’s general fund now than we’ve had in the history of the state,” she said.
She anticipates that tax cuts from the Republican federal tax bill will further increase Oregon’s general fund.
Other funding sources, she said, could include a higher cigarette tax or taxes on self-insurers—some large corporations and unions.
If Measure 101 passes, who is going to pay the new tax?
Insurers and large hospitals, Adamson and Hagens said, would bear the burden of the tax, and have already agreed to pay it.
Parrish argued the impact would be much broader. She said schools would pay as well, and the legislature could easily expand the tax to small hospitals and businesses.
If the measure passes, will healthcare get more or less expensive for consumers?
Hagens argued that without Measure 101, Medicaid recipients who lose coverage will be forced to seek costly treatment in emergency rooms. Those additional costs will be passed on to insured people.
Parrish said insurance companies and hospitals will pass on the additional cost of the tax to consumers in the form of higher premiums and healthcare costs, resulting in a de facto “sales tax on healthcare.”
“Providence isn’t going to pay this,” she said, “you will.”
Fact-check: The measure does allow insurance companies to raise rates, but caps increases on premiums at 1.5%. Insurers can include an optional note along with the rate increase informing consumers that they had to raise rates because of the tax.