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Oregon health care tax proponents, opponents argue their cases

The state Legislature recently passed a health care tax to help fund Medicaid over the next two years
By Edward Stratton

The Daily Astorian

Published on January 4, 2018 12:01AM

Last changed on January 4, 2018 8:48AM

Voters will decide on new taxes for health care on Jan. 23.

The Daily Astorian

Voters will decide on new taxes for health care on Jan. 23.

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The state began mailing out ballots Tuesday for Measure 101, which asks Oregon voters to affirm or overturn more than $300 million in new, temporary taxes on hospitals and other health care providers over the next two years approved by the state Legislature.

Ballots are due by 8 p.m. Jan. 23. Clatsop County officials recommend placing them in an official dropbox within two weeks of that date, rather than mailing.

Proponents arguing “yes” on the measure say the money is needed to avoid up to 350,000 low-income residents potentially losing health care.

Opponents arguing “no” claim the additional revenue is an unnecessary and unfair tax that could be funneled to things besides Medicaid.

Funding Medicaid is a state and federal partnership. Hospitals pay a 5.3 percent tax on net revenues. Once matched by the federal government, the money is returned to them as a group and redistributed. The Legislature this summer passed House Bill 2391, a $670 million health care provider tax to fill a gap in Medicaid funding over the next two years and avoid closing a newly constructed psychiatric hospital.

The package includes a 0.7 percent tax on net revenues of hospitals that is not returned, but placed in a state fund for health care. Republican state Reps. Julie Parrish of West Linn, Cedric Hayden of Roseburg and Sal Esquivel of Medford gathered around 84,000 signatures to place the 0.7 percent tax on the ballot.

A “yes” vote on the measure would affirm the 0.7 percent tax on hospitals, as well as taxes on insurers, the Public Employees Benefits Board and coordinated care organizations. A “no” vote would repeal the taxes.

Democrats wanted the election conducted in January, saying if the measure is overturned lawmakers would need to deal with a huge funding gap when they return to Salem early next month.

More than 160 health care, education, union and advocacy groups have come out in support of the measure.

Patty Wentz, a spokeswoman for the Yes on Healthcare campaign supporting Measure 101, met with The Daily Astorian’s editorial board last week. With her were Erik Thorsen, CEO of Columbia Memorial Hospital for the past 15 years; Dr. Katrina McPherson, a pediatrician at the hospital; Debbie Morrow, a member of the Warrenton-Hammond School Board, youth support nonprofit Warrenton-Hammond Healthy Kinds Inc. and the Columbia Pacific Coordinated Care Organization; and Andy Davis, a data analyst for Greater Oregon Behavioral Health Inc.

An estimated $320 million in tax revenue the measure is referring to voters would be matched by $963 million from the federal government if approved, Wentz said.

“Without Measure 101, we’re facing a $1.3 billion budget cut,” she said.

Thorsen said the hospital’s finances have improved as more people have become insured under the federal Affordable Care Act and the state’s Medicaid expansion. Low-income patients used to visit the emergency room when they became sick, because they had no health insurance, and the hospital was forced to write off its most expensive care as a loss. Now most of those same patients have insurance and access to primary care doctors, resulting in better treatment.

Thorsen and the other proponents argued that any increase in the uninsured population would hurt preventative and long-term health care for low-income Oregonians, while threatening jobs and programs.

State Sen. Betsy Johnson, who supports the measure, said the state is faced with two choices — come up with the funding, or take as many as 350,000 people off insurance.

“There will be very dire consequences” if the measure fails, she said.

Parrish and Hayden met with The Daily Astorian in December to make their case against Measure 101. They say the taxes being referred to voters in the measure unfairly place the burden for funding Medicaid on individuals, small businesses, school districts and college students, while exempting unions and large, self-insured employers. They also argue the state is inflating the caseload of people on Medicaid and planning to use some of the new tax revenue for purposes besides health care.

“We’re pretty convinced that in the first biennium, they have about $195 million already earmarked for other purposes that will come out of these taxes,” Hayden said, adding that amount will only grow each biennium.

Parrish, a critic of the state’s handling of Medicaid expansion, called the measure a hidden sales tax on Oregonians buying health care insurance.

“The Legislature, and the governor and the agency have broken health care at every step of the way,” she said.

“This is an opportunity to fix it, and that’s how I would explain it,” she added. “It is a tax. It is unfair … in terms of who it has been levied on, and we can’t keep allowing the hundreds of millions of dollars of waste of our health care dollars.”



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