Legislators Close to Deal on Provider Tax

Details still sketchy as deal nears to insure every child and 100,000 adults

April 30, 2009 -- Sen. Alan Bates (D-Ashland) expects to announce a deal next week that will settle months of debate on taxing hospitals and health insurers to expand the Oregon Health Plan.

And when he does, the hospitals and the insurers will agree whole-heartedly, Bates said. Such a feat seemed impossible just weeks ago. Discussions are also evolving on whether to tax union trusts and self-insured employers.

Bates, who is among four lawmakers privy to the negotiations, would not disclose details but said the deal is very close. He’s been meeting behind closed doors with Sen. Betsy Johnson (D-Scappoose), Reps. Mary Nolan (D-Portland) and Mitch Greenlick (D-Portland) to wrap up the negotiations.

“If it isn’t done in about a week, it might just fall apart,” said Bates, laughing. “We have enough people agreeing at this point that in a week we’ll have a package we can show to the public.”
Bates said the tax would succeed in drawing down the full federal matching funds (approximately $1 billion) to insure 80,000 children – every child in the state – and 100,000 adults.
“They are literally doing the math on this right now,” Bates said on Wednesday.
It’s unlikely the provider tax will lead to a cost shift and increase commercial insurance rates, Bates said. If anything, the new plan will save money.
“The number of people going to the emergency room is going to increase no matter what because of the economy,” Bates said. “Hospitals understand they’ll have a hard time shifting costs because it pushes premiums up, and they have fewer commercially insured patients coming in.”

Hospitals and health insurers won’t try to game the system for more money, he added. “Everyone’s on the same page saying this thing has got to be brought under control. A growing number of people are becoming uninsured. Our economy is collapsing. We’ve got to get together and drive this in the right direction, which has made it possible to have a reasonable discussion about provider taxes both with commercial insurers and the hospitals. We don’t want to hurt anybody. We won’t bring a plan out that everyone doesn’t support inside and outside the building.”

For related articles about the provider tax click here.

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