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Kotek approves universal health care board but cites concerns

Governor calls $2-million plan costly, potentially duplicative, but supporters say it’s a crucial step toward needed reform.
August 8, 2023

Gov. Tina Kotek has signed a bill launching a new plan for a single-payer health care system in Oregon, but expressed concern it will waste money without achieving its aims. 

Kotek laid out her fears about the bill in one of multiple signing letters she issued Friday approving legislation passed by lawmakers in the 2023 session. 

Senate Bill 1089 sets up a new nine-member Universal Health Plan Governance Board tasked with designing the nation’s first state-based single-payer system, in which the government pays all health care costs and collects all the revenue to pay for it. Other states, including Vermont and California, pursued single payer only to abandon their plans. 

The bill grew out of the work of an earlier legislative task force that recommended Oregon adopt an expansive, statewide health insurance plan that does away with premiums, co-pays and deductibles that would be paid for with federal funds and $22 billion in new taxes. Its goal, widely supported by Oregonians, is to combat health inequities, reduce waste and wipe out consumer debt.

The new board, set up within the state Department of Consumer and Business Services, is tasked to deliver its plan to lawmakers by September 2026. A fiscal impact analysis estimates its cost at nearly $1.9 million in the current two-year budget, based on staff costs and estimated mileage and per-diem costs of nearly $37,000 per member.

In her letter, Kotek expressed her support for the intent of the bill, and also cited the state’s strides in expanding coverage. 

The Medicaid-funded Oregon Health Plan covers one in four Oregonians, Kotek wrote. She also pointed to what she called Oregon’s “groundbreaking” Medicaid-based programs. Those include enhanced reproductive and gender-affirming care, as well as Cover All Kids and Cover All People, which expanded health coverage to low-income residents regardless of immigration status. 

Additionally, Kotek pointed out that lawmakers expanded programs and approved creation of a Basic Health Program to cover low-income residents who make too much for the Oregon Health Plan. 

“All of these contribute to the goal of increased access to quality health care at lower costs based on our ability to leverage Medicaid infrastructure,” wrote Kotek. 

Noting the earlier task force and plan, Kotek said the bill creates “a potential risk of duplicative efforts and inefficient spending of $2 million in taxpayer funding.” She added that the estimated price tag for the board  likely “underestimates the resources required to fulfill the intent of the bill.”

She urged legislative leaders to “provide clearer direction” to the new board when lawmakers reconvene in February. 

Kotek called for the “highest degree of accountability” for new state programs and “mission-focused discipline” after the strain of the pandemic. 

Kotek’s concerns echoed those of the opponents of the bill, who included Oregon’s major insurance carriersAHIP  and the Oregon Association of Health Underwriters. As the bill made its way through the Legislature, the groups expressed concerns about its feasibility and whether it would conflict with ongoing health care initiatives. Representatives for these groups either declined to comment or didn’t respond to inquiries from The Lund Report. 

Supporters say concerns can be addressed

Maribeth Healey, executive director of Health Care for All Oregon, told The Lund Report that Oregon has done “a tremendous job with the patchwork quilt” of health care programs. 

“But I think we’d all like just one big quilt,” she said. 

Healey said setting up a single-payer system in Oregon will be a big change that will require the state to secure federal waivers or even changes to federal law. But she said Kotek’s concerns can be addressed, and the creation of the governing board is a significant step toward single payer. Members of Congress are considering legislation that’ll make it easier for states to experiment with single payer and Oregon could emerge as a leader. 

Dr. Samuel Metz, a retired physician who served on the earlier task force, told The Lund Report that Kotek’s statement points to one of the central challenges of setting up a state-based single-payer health care system. 

Federal law restricts states from commingling funds from Medicare, Medicaid and the Affordable Care Act, which Metz said will be necessary for single-payer. Other federal laws prevent states from completely upending private insurance, he said. 

Metz said Kotek’s statement suggests she’s more focused on expanding Medicaid programs and making them more efficient than pursuing federal waivers or changes to law that’ll be necessary for a single-payer system. 

“Gov. Kotek has her hands full with houselessness, with education, with behavioral health,” he said. “She probably shouldn’t try and create an upheaval in health care with the time she has left.”

Metz said implementing a state-based single-payer system will take five to 10 years and will require sustained advocacy. But once it’s implemented he said it will help Oregonians facing medical bankruptcies or who are dependent on employers for health care. 

State Sen. James Manning, a Eugene Democrat and single-payer proponent who cosponsored the bill, told The Lund Report that the challenges ahead can be overcome. 

Manning said he agrees the new board doesn’t have enough funding but thinks lawmakers will allocate more. 

He said Kotek’s concerns about the bill are fair. But he said the governor will appoint the new board’s membership and it will have time to respond to the issues she raised. After that, lawmakers will have a chance to modify the plan, he said. 

While Oregon’s recent efforts to expand health care coverage are positive, he said, they are “Band-Aid solutions.”

“You have to look at it holistically,” he said. “(The board) will come up with a plan that will benefit everyone.”

You can reach Jake Thomas at [email protected] or via Twitter @jakethomas2009.


Submitted by David Gilmour on Tue, 08/08/2023 - 13:56 Permalink

Whether the new board succeeds or fails will depend on WHO Governors Kotek assigns to the Board. She should avoid appointment of those who oppose Single Payer who may work to sabotage it, such as folks from the insurance industry or Hospital organizations owning their own insurance plans, such as Providence. 

Submitted by Ken Rosenberg on Sat, 08/12/2023 - 23:37 Permalink

We act as if the current system covers nearly everyone. Many of the working poor cannot afford coverage. And most insurance plans come with significant premiums, deductibles and co-pays. Since most of the insurance plans are non-profits that act like for-profit entities, they are dedicated to cutting costs by denying care. 

Ken Rosenberg, MD, MPH (OHA epidemiologist, retired)

Submitted by Richard Valencia on Tue, 10/17/2023 - 11:15 Permalink

I believe the universal health plan can work and is needed in any state that has an "at will" employment policy. Let's face it, such policies enable employers to fire anyone, anytime, for any reason and these individuals require adequate medical services. Unfortunately, the state's unemployment system and benefits falls way short in providing claims to cover medical expenses. Also any out the door severance payouts, would be eaten up rapidly by any, high cost supplemental plans, such as COBRA. 

Due to the fact that Oregon has one of the highest state tax levels in the union, I can't help but feel for the Oregon tax payers. I do feel that those who pay into this plan, should benefit from it, by way of state tax reduction or a deduction from tax filing, much like a HSA. Maybe this is already part of the bill? 

Obviously a board is needed and the board needs to consist of individuals who are capable of thinking out of the box, but it can be done and be successful for the state. 

Submitted by Ed Carter on Wed, 01/17/2024 - 17:26 Permalink

$22 billion in new taxes is a ridiculously low estimate.  It's trully deceptive.  What is the cost?  There are 4,233,358 Oregonians. Multiply that by the cost of the plan per month and times 12.  Remember it's a plan with no deductibles and no copays.  If you don't really knowwhat the cost would be, you should find out.  The actual cost is staggering.  Right now healthcare is paid for by citizens and the federal government and by business.  You don't want medium and high income people to leave for another state because of the enormous taxes that would be required.