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Oregon Senate Passes Provider Tax, OHA Budget, with Ferrioli’s Support

The Senate Republican Leader scoffed at the notion that the GOP never supports tax increases or turns a cold shoulder to the state’s most vulnerable citizens, even as Congressional Republicans have vied to end the Medicaid expansion.
June 21, 2017

The $19.9 billion budget for the Oregon Health Authority and the $548 million provider tax to help fund the state’s share breezed through the Oregon Senate on Wednesday.

The budget package now goes to Gov. Brown, who is expected to sign the legislation, ensuring that the Medicaid program will continue for the next two years for a million Oregonians.

The package also boost funding for public health by $5 million and community mental health by $20 million while maintaining the operation of state mental hospitals in Salem and Junction City. The taxes on hospitals, health insurers and coordinated care organizations will expire in 2019.

While Oregon House Republicans tried to stall the tax increase and the OHA budget, the Senate Republican leader voiced his support for the tax package on the floor:

“The narrative is that Republicans don’t vote for more revenue,” declared Sen. Ted Ferrioli, R-John Day. “The narrative is that we are insensitive to those in need. Neither of those things are true.”

“Certainly this bill has a tax built into it that I don’t particularly like,” Ferrioli said. “On balance, I think it is a good public policy.”

Like the House Republicans, Ferrioli and other Senate Republicans objected to the new 1.5 percent health insurance assessment, which will be used to fund Medicaid as well as develop a reinsurance program for the rocky individual health market.

“I think there was a better way to do this,” said Sen. Jeff Kruse, R-Roseburg, who opposed the tax bill, House Bill 2391, after earlier supporting it. As Kruse reminded his colleagues, Congress is likely to upend the healthcare system and possibly cancel the Medicaid expansion, making any decision to continue funding the Oregon Health Plan temporary.

The bill passed anyway, 20-10, with three Republicans supporting it -- Ferrioli, Sen. Fred Girod of Stayton and Sen. Jackie Winters of Salem.

Winters went so far as to be lead carrier for the bill on the floor: “Not only does it ensure access to care, it makes sure that Junction City, our mental health system stays open and invests in public health,” she said.

In the House, retiring Rep. Sal Esquivel of Medford, was the only Republican to support the tax hike.

On top of opposing the tax on health insurers and coordinated care organizations, Kruse said the tax could have been made up by increasing the provider assessment on rural hospitals to 6 percent, since these entities will be held harmless by the new 4 percent assessment.

Sen. Elizabeth Steiner Hayward, D-Beaverton, said dealmakers discussed a higher assessment for rural hospitals, but since they had never been assessed in this way before, she said she wanted to make certain that they could handle it financially:

“We know they run on thin margins,” she said.

Reach Chris Gray at [email protected].

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