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Lawmakers propose increase to Oregon Health Authority budget

The budget overlaps with Gov. Tina Kotek’s priorities but leaves out two of her large funding requests
The Oregon Health Authority in Salem. | OREGON HEALTH AUTHORITY
June 2, 2023

The Legislature’s budget writers want to increase the Oregon Health Authority’s budget by $2.4 billion over the next two years as the agency seeks to expand coverage for low-income Oregonians and increase staffing at the state’s major psychiatric facility, among other things. 

A Joint Ways and Means Committee subcommittee on Wednesday approved an amended version of Senate Bill 5525, which appropriates $35.2 billion for the agency for the state’s 2023-2025 budget. Of that, $19.6 billion will come from federal funds. Another $5.5 billion will come from the state General Fund, the largest pot of discretionary money, with the rest coming from other sources. 

The total budget would fund the equivalent of 5,510 full-time employees, up from 5,190 in the previous budget. 

The proposed budget, which still needs approval from the full committee and the Legislature, represents a $667 million boost over what Gov. Tina Kotek requested for the health authority in January.

The health authority’s budget is the largest in state government. By comparison, the current state budget contains $7.4 billion for the Education Department and $17 billion for the Department of Human Services. The Department of Corrections gets $2.2 billion. State Police get $855 million. 

Its consideration comes as state health officials are trying to set up a new health care program to provide free care for a portion of the working poor, bring the state’s psychiatric facility into compliance with a court order, bolster behavioral health and help stem the proliferation of deadly synthetic opioids. 

Whether lawmakers approve the budget before the session shuts down is in doubt, as a Republican-led walkout in the Senate has stalled legislative business for weeks. Lawmakers could return and pass the state budget in a special session. But state Sen. Elizabeth Steiner, a Portland Democrat who chairs the Joint Ways and Means Committee, earlier told The Lund Report that a delay means the state could lose millions in federal matching funds.

One of the biggest items in lawmakers’ health authority budget is $922.9 million to fund federally approved changes to the Medicaid-funded Oregon Health Plan. Federal funds will account for $781.7 million of that budget line with state funds making up the rest.

Steve Robbins, legislative fiscal analyst, told lawmakers during a hearing Wednesday that the changes will allow the Oregon Health Plan to spend Medicaid dollars on housing and nutrition while allowing children as old as 6 to stay on the low-income health program regardless of changes to their family’s eligibility. 

The proposed budget also includes $637 million in federal funds toward the overall $748 million price tag for a Basic Health Program. The new health plan, which still requires federal approval, would offer coverage for low-income Oregonians who make too much to qualify for the state’s version of Medicaid.

Both Kotek’s proposed budget and the one being advanced by lawmakers included funding for the new health plan, as well as $30 million for public health modernization, $2 million to help Oregon set a state-based health insurance exchange and $3 million to monitor well water in Lower Umatilla Basin.

The budget advanced by lawmakers, however, leaves out two of Kotek’s larger requests. The budget doesn’t fund $30.2 million for the health authority’s Equity and Inclusion Division that would hire 70 additional employees to implement a plan to eliminate racial health disparities by training the authority’s workforce on how to respond to civil rights issues and interact with the public better. 

It also leaves out $8 million to fund additional support and training for workers at Oregon State Hospital, where hiring has been a struggle despite it being the largest workforce division in the health authority. 

The budget also includes new spending on behavioral health. A larger item is $39.6 million for the new 988 crisis line and mobile crisis units. Lawmakers had earlier looked to fund 988 with a cell phone tax. But the budget will fund the program with the state’s General Fund, the largest source of discretionary money. 

Other behavioral health spending includes:

  • $7 million for Community Mental Health Programs, local nonprofits that provide behavioral health and other services,  for civilly committed people. State hospital beds have increasingly been filled with so-called “aid and assist” patients sent to the facility for restoration treatment so they can face criminal charges. That’s left less room for people who’ve been civilly committed because a judge deems them unable to care for themselves. 
  • $15 million for substance use disorder facilities. 
  • $6 million to expand an incentives program for behavioral health care providers.
  • $3.1 million to expand the state’s child and family behavioral health workforce. 

committee document contains few details on how the health authority will spend the behavioral health money. 

Spokespeople for the Oregon Health Authority and Kotek were earlier unable to say how many treatment beds would be created by the budget being crafted by the Legislature. The Lund Report has reached out to House Speaker Dan Rayfield, D-Corvallis, and Senate President Rob Wagner, D-Lake Oswego, with questions on how the budget will direct money for behavioral health programs. 

The budget also lists $40 million for opioid harm reduction. The money comes from a settlement with drug makers accused of contributing to widespread opioid addiction. 

Dave Baden, health authority interim director, told the committee the money will be used for a clearinghouse to distribute Naloxone, an opioid overdose-reversing medication, to schools and other organizations. 

This story will be updated if The Lund Report receives requested details regarding behavioral health care spending.