One in three Oregonians relies on federally and state-supported Medicaid for their health insurance, but a bill advancing in Congress could have a devastating effect on enrollment and the health status of many residents.
As part of the Trump administration’s drive to slash taxes, the Republican majority in Congress has proposed Medicaid changes that could mean the loss of benefits for millions of Americans – including in Oregon, where 1.4 million people rely on the Oregon Health Plan for their health care coverage.
The Republican bill would institute a work requirement, mandate twice-yearly eligibility checks, impose copays and reduce federal contributions in states like Oregon that use state dollars to provide Medicaid benefits for undocumented immigrants. Other coverage changes are being considered as well: For instance, a recent Trump administrative directive warned states to not use Medicaid to pay for gender-affirming care.
The bill passed the House Energy and Commerce Committee on Tuesday following a party-line vote. It needs to pass the House and clear the Senate. Both are controlled by Republicans but some party members oppose any changes that would curtail the popular health care program that now provides free health, dental, vision and behavioral health coverage.
Though its final passage is far from certain, state lawmakers, health officials and the governor’s office are worried about the bill because it would have a big impact on Oregon.
“I am outraged by the proposed Medicaid cuts. It’s a reckless plan that will hurt people and Oregon’s health care system,” Gov. Tina Kotek said Tuesday in response to the proposal.
Proposal coincides with declining state revenues
Nationwide, nearly 80 million people are enrolled in Medicaid and the Children’s Health Insurance Programs for kids. Estimates by critics and congressional analysts indicate between 7 million and 14 million people could lose coverage under the GOP’s proposal.
It’s unclear how many might be affected in Oregon, but the state, which has among the highest per-capita Medicaid enrollment nationwide, likely would be hit hard — and at a time of sluggish growth. Oregon’s chief economists said Tuesday in releasing the latest revenue forecast that lawmakers will have nearly $760 million less than expected for the next two-year budget they’re now finalizing.
The federal government currently pays 90% of the cost for people who qualify for Medicaid under the Affordable Care Act. Prior to enactment of the Medicaid expansion in 2014, the program mainly insured poor families with children and adults with disabilities. Now those who earn up to 138% of the federal poverty level, or nearly $21,000 a year for a single person and just over $43,000 a year for a family of four, qualify. That provision increased Oregon’s Medicaid enrollment by 60% according to an analysis by Oregon Health & Science University.
Oregon has further increased insurance enrollment by providing health care benefits for people who earn up to 200% of the federal poverty level, or about $30,000 a year for a single person and more than $62,000 a year for a family of four. It also provides Medicaid benefits for low-income immigrants who lack legal residency. The state now boasts a 97% insured rate, its highest ever, according to the Oregon Health Authority.
The Republican bill proposes rolling back the 90% reimbursement rate to 80% for states like Oregon that use state dollars to fund Medicaid benefits for undocumented immigrants. More than 100,000 people are now enrolled under Healthier Oregon, the state program for undocumented immigrants, which first went into effect in mid-2022.
The Oregon Health Authority told The Lund Report that a cut in federal payments to 80% would cost “at least $1 billion in true Medicaid program dollars.”
State lawmakers would have a tough time making that up.
“We’re not in a recession yet but revenues are down to make investments,” said Portland Democratic Rep. Rob Nosse, chair of the House Health and Behavorial Health Care Committee. “Our ability to cover the cost of revenue reductions is very slim.”
He said state lawmakers would be faced with tough choices.
“We'd have to roll back on Healthier Oregon pretty significantly or outright eliminate the program to protect our ability to get federal money for Medicaid,” Nosse said.
‘That’s just mean’
Another Republican proposal on increasing eligibility checks to twice a year would also affect enrollment, Nosse said.
“That's just mean,” Nosse said. “It just kicks people off the plan, and then the federal government doesn't have to send money to us to cover the cost.”
Most states have to re-enroll people yearly but Oregon has a federal waiver that allows it to check eligibility every two years. Children who qualify also stay on the program until they’re 6. It’s unclear how the Republican provision would affect Oregon’s waiver. If stepped up enrollment went into place, Nosse said it would likely hurt younger people and new Medicaid enrollees the most.
“Those forms are not easy to fill out,” Nosse said. “This is literally designed to discourage people from staying on the plan.”
Bill includes work requirement
The bill would also add work requirements for those on Medicaid. To retain benefits, they’d be required to work, do community service or be enrolled in an educational program for 80 hours a month. Only two states — Arkansas and Georgia — have implemented a work requirement for Medicaid, according to the Commonwealth Fund. Arkansas ended its program in 2019 after less than a year over a court order, while Georgia adopted its requirement in 2023.
Other states are now considering adopting a work requirement though the Congressional Budget Office said in a 2022 analysis they’ve had mixed results. In Arkansas, 18,000 people lost coverage while the requirement was in effect.
Amy Bacher, spokesperson for the Oregon Health Authority, said the requirement would “add administrative red tape” for the 670,000 people who qualify for Medicaid and currently work.
“It would result in coverage interruption, coverage drops and care delays as demonstrated in other states,” Bacher said in an emailed statement.
The Republican proposal would also cost beneficiaries more to access certain services. They’re proposing adding copays up to $35 for services. Providers would be allowed to deny services if patients couldn’t pay.
Bacher said the proposal could have a big impact in rural Oregon, with hospitals in the eastern part of the state especially reliant on Medicaid reimbursements to make ends meet. Bacher said administrators would be forced to “make difficult decisions to further reduce services due to fewer insured, more uncompensated care and less program funding.”
For now, officials and legislators are keeping their eyes on Washington. House Speaker Mike Johnson would like to pass the provisions as part of the Trump tax cuts by Memorial Day. If that happens, Nosse said lawmakers would have enough time to figure out the budget. It needs to be completed by the end of session at the end of June.
“There's worry,” Nosse said, “but I also think for most of us, it's a little bit wait and see.”
