Provider Tax Close to Agreement

“The devil is in the details,” said Bates, who's been meeting with Sen. Betsy Johnson, (D-Scappoose) Reps. Mary Nolan (D-Portland) and Mitch Greenlick (D-Portland). “These have been long and difficult negotiations.”

 

The tax on hospitals and health insurers will raise enough funds to cover all uninsured children (80,000) and close to all low-income adults (100,000).

 

Commercial insurers have agreed to pay a 1-1.5 percent tax, but insist those dollars only be used for children, according to reliable sources. Medicaid managed care plans would assume responsibility for approximately 65,000 children whose families earn below 200 percent of the federal poverty level. For families with higher incomes, their children (approximately 15,000) would be covered by commercial insurers.

 

A 3.2 percent tax will be imposed on urban hospitals, according to Janet Meyer, who runs Tuality Health Alliance. The hospitals have demanded all of their money back, she told medical directors of Medicaid health plans on Monday (May 11). “As long as our rates don’t get cut, the 100 percent locks in what we can do for doctors and non-institutional care,” she said, because “hospitals want to recover the full cost of the tax.”

 

Bates is hopeful the provider tax can draw down $1 billion in federal matching funds. “We’re within the ball park,” he said, adding that the tax proposal passes muster with Oregon’s Department of Justice. “The actuarial work has been done; the numbers add up.”

 

Yet Bates acknowledged “tough budget discussions” await lawmakers once the revenue forecast is revealed on Friday. Some officials are estimating that Oregon’s financial picture could throw a wrench into funding for education, seniors, the disabled, public safety and other social service programs.

 

At the same time, caseloads keep climbing for the Oregon Health Plan, and enrollment numbers could reach 450,000 in the coming months, Bates said. If so, the pressure will be on lawmakers to figure out whether some of the provider tax revenue should offset that need.  

 

While that debate ensues, the provider tax will start winding its way through the House Revenue Committee and the Joint Ways and Means Committee -- as early as next week -- before coming up for a full vote in the House and Senate.

 

For our related coverage on the provider tax click here.

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