The Senate Democrats laid out the broad points of their 2017 agenda on Wednesday, making clear that the budget, and particularly the $1 billion reduction in federal healthcare dollars flowing into Oregon would dominate the legislative session.
“We have to bring up revenue, and we need to do more to rein in cost growth,” said Sen. Richard Devlin, D-Tualatin, the Senate chairman of the Committee on Ways & Means.
“Every session, it gets worse and worse,” said Senate Majority Leader Ginny Burdick, D-Portland, who argued that state revenues were too low and too volatile. “We go up and down and up and down; it’s very unsustainable.”
The Oregon Health Authority is responsible for about half the overall state budget deficit, said Sen. Elizabeth Steiner Hayward, D-Portland, and that money is primarily needed to fund the state’s Medicaid program, the Oregon Health Plan.
Steiner Hayward, who will oversee the healthcare budget as chairwoman of a budget subcommittee, said that the overall budget for the Oregon Health Authority -- $19.2 billion -- was roughly the same as the current budget’s $19.1 billion in total funding. But the state is running out of the extra money it received to transform the delivery system through coordinated care organizations and the federal government cut its share of funding into the program.
She said the Obama administration had not only required the state to pay a small portion of the costs for the new Medicaid expansion population, but it had lowered the rates it would pay for people eligible under the traditional program. “When the federal government sees an economy doing well, they lower the match rate,” Steiner Hayward said.
It’s an open question what the new Trump administration will do that could affect the system. The new president has promised not to cut Medicaid, but at the same time he has vowed to scrap the Affordable Care Act and replace it with some undisclosed program. “We are working under the auspices of the Affordable Care Act, and we don’t know what the future will be,” noted Sen. Laurie Monnes Anderson, D-Gresham, the chairwoman of the Senate Health Committee. But “we started our reform before the passage of the Affordable Care Act.”
Monnes Anderson said the Oregon Health Leadership Council was convening many of the major players in the state healthcare industry to negotiate provider assessments as well as possible insurance assessments. “They want to make sure we can keep our expansion population,” she said.
She said the group was also debating a proposal to reduce the number of covered healthcare procedures on the state’s prioritized list, which rations care based on evidence-based medicine.
Council president Greg Van Pelt said he was not ready to comment on the group’s negotiations.
Block Grants
Some congressional Republicans would like to upend the Medicaid system by offering states block grants rather than a partnered approach to providing healthcare to poor and vulnerable citizens.
Devlin was cool to the idea of block grants -- in the past he said it generally meant a decrease in funding without the promised removal of red tape. None of the Democrats speaking with reporters Wednesday, were enthusiastic with the idea of a decentralized federal government, even if Oregon was ready to go its own way.
“I don’t take solace in which states can choose whether a woman can have an abortion, or which states would have the right to choose if children with a disability can go to school or pick and choose who citizens are allowed to marry,” said Sen. Sara Gelser, D-Corvallis.
Senate Democrats will operate with one less member than last year, but still maintain a strong 17-13 majority over the minority Republican Party. Oregon is one of just five states in the nation that has put the Democratic Party in charge of both houses of the Legislature and the governor’s office, giving them wide leverage to set the agenda.
However, the Oregon Constitution requires a three-fifths majority vote to pass any tax measures, and the Democrats are one vote short of this supermajority in each house, giving Republicans the power to stop any revenue increases if they vote en bloc.
Republican Response
Jonathan Lockwood, a spokesman for Senate Minority Leader Ted Ferrioli, R-John Day, told The Lund Report the Republican caucus would be open to “responsible, targeted revenue reform that benefits all Oregonians.”
“Senate Republicans will be leading Oregon forward by prioritizing education first, bringing sustainability to Oregon's public pension system to protect current and future retirees, and reigning in overspending to shield vulnerable Oregonians from the governor's cuts,” Lockwood said.
Of particular concern has been a steep cut in funding to Oregon Project Independence, which offers assistance to middle-class and low-income seniors to allow them to remain in their homes and stay off Medicaid, which would end up costing the state more.
Burdick ruled out a sales tax for the 2017 session -- calling it the “third rail” of Oregon politics, but otherwise the Democrats were vague on revenue proposals. In response to a question from The Lund Report, Burdick was unable to say whether her caucus supported Gov. Kate Brown’s plan to raise cigarette and liquor taxes.
Despite its healthy reputation, Oregon has below-average cigarette excise taxes and has not raised its liquor tax in decades. About 12 percent of Oregon deaths for adults under age 65 are linked to alcohol -- which puts the state in the top 10 nationally, according to the Centers for Disease Control and Prevention.
Chris can be reached at [email protected].
