Oregon lawmakers are on track to approve a bigger budget for the Oregon Health Authority, with tens of millions of dollars allocated for mental health, maternity services and reproductive health care.
House Bill 5025, the agency’s two-year budget starting July 1, totals nearly $42 billion and marks a 12% increase from the current two-year budget. It also increases the number of budgeted employees by nearly 300.
The bill was passed by the joint budget-writing committee joint budget-writing committee on Tuesday and now moves to the House and Senate floors. If passed by the chambers as expected, it will go to Gov. Tina Kotek to sign.
The bill was among dozens of agency budgets and other spending approved by the Joint Ways and Means Committee on Tuesday. But it represents the largest share of Oregon spending and sparked objections from eight Republicans, who are in the minority.
They included committee co-chair Sen. Fred Girod of Stayton. He indicated that he thinks the agency is mismanaged, saying it was “totally out of control.”
“Somebody has to really look at this agency and bring it under control so that the dollars that we're spending actually go for the betterment of the state,” Girod said. “My feeling is that you could give a $5,000 problem to OHA and they could make it a $5 million problem with really poor results.”
The bill provides more funding than the agency initially requested, in part because the number of low-income people covered by the Medicaid-funded Oregon Health Plan has exceeded projections.
The Oregon Health Authority’s budget includes nearly 6,000 full-time employees and covers a range of programs, from health policy to health insurance programs for state employees to the Oregon Health Plan, which covers 1.4 million Oregonians. The plan is the biggest-ticket item, representing about 75% of the overall budget or $31.6 billion in state and federal funds.
Though passed by the Ways and Means committee that decides Oregon spending, the budget might come up again for review, depending on what happens in Washington D.C. A Republican budget bill that President Donald Trump said he wanted on his desk by the Fourth of July could slash Medicaid and food aid, with Oregon facing a potential loss of $1 billion or more in federal funds for Medicaid and cuts to other safety net programs.
“If that piece of legislation goes through Congress, that guts Medicaid, guts the SNAP program, goes after some really core programs for the country, every state in the nation is going to have to make some hard choices,” Gov. Tina Kotek said during a press event Monday in response to a question from The Lund Report. “The reality is no matter what we do on the state side, we will not have the dollars to make up for those gaps. People will lose services.”
For now, lawmakers have dedicated tens of millions of dollars to addiction and mental health care, with $43 million that will be used, in part, for residential addiction treatment.
Another $10 million is earmarked for harm reduction, which aims to keep people from overdosing on drugs. And nearly $45 million is dedicated to local mental health programs, including $10 million for those that work with people who need treatment before facing charges and $13 million for deflection programs that were developed last year after lawmakers recriminalized illegal drugs. These programs aim to steer people away from jail and towards treatment.
A Portland Democrat, Rep. Rob Nosse of Portland, said that the agency’s budget includes “meaningful moves” to strengthen the behavioral health system and increase access to services that Oregonians need.
“That’s in spite of a tough budget climate,” Nosse said. “It’s not as much as I want, but we’re definitely making improvements.”
Money for mental health, other care
Lawmakers dedicated more than $1 billion for the Oregon State Hospital, which was recently cited by the Centers for Medicare and Medicaid Services for safety lapses that have led to patients dying.
The state hospital’s budget includes $56 million to address safety and staffing issues and to get it in compliance with a court order mandating that it quickly admit people who need mental health treatment to face criminal charges.
Lawmakers also approved $49 million for hospitals that serve a high percentage of Medicaid-eligible patients; $30 million to increase rates paid to coordinated care organizations, which manage Oregon Health Plan patients; and $25 million to raise rates paid to hospitals for maternity care.
The maternity care allocation comes as declining birth rates and budget pressures have led to the closure of rural maternity units nationwide including in Redmond in 2019 and Baker City in 2023. Samaritan Health officials are currently discussing the potential closure of maternity services in Lebanon and Lincoln City.
The budget includes $10 million for reproductive health care to address the expected loss of federal funds by Planned Parenthood, so that women across the state can still be screened for cervical cancer, get a wellness check or obtain birth control.
The Trump administration is planning to strip Planned Parenthood of all federal funding, regardless of the service. The organization provides abortions, which aren’t funded by federal dollars, but it mostly offers a range of other types of reproductive health care to a high volume of low-income women.
The organization did not respond to a request for comment.
If the Republicans in Congress move forward with their spending plan, Kotek said both Republicans and Democrats will have to decide on cuts together, probably in a special session this summer. One program that could come up for discussion is Healthier Oregon, which uses state dollars to extend coverage under the Oregon Health Plan to people who lack immigration documentation. The program currently serves about 105,000 people.
The Republican bill calls for cutting the Medicaid reimbursement rate for states that provide health insurance to people without residency papers from 90% to 80% for those who qualified for Medicaid under the Affordable Care Act. They total hundreds of thousands in Oregon.
Kotek and other lawmakers so far have ruled out ending Healthier Oregon to avoid a potential cut in federal Medicaid reimbursements, which pay for about 70% of Medicaid care.
A note from the Legislative Fiscal Office on the Oregon Health Authority’s budget indicated that spending on Healthier Oregon — which was budgeted at about $715 million over the past two years — would be reduced by about $450 million in the next budget cycle, in part because enrollees are using far fewer services than expected. Also, some who obtain legal residency would be moved off the program as would people with increased earnings.
