The Oregon Senate has passed a bill that will raise billions in federal dollars for the state’s Medicaid program, and allocate a substantial portion back to hospitals.

It now goes to the governor for her signature.

The bill, HB 2010, extends two taxes through 2032: A 2% assessment on health insurance plans and managed care organizations and a 6% assessment on hospitals’ net revenue. Both were set to expire over the next two years.

The bill passed easily with bipartisan support. Six Republicans joined the Democratic majority to pass it 22-5.

The taxes, and the federal matching dollars they qualify for, are one of the cornerstones of funding the state’s Medicaid program, the Oregon Health Plan. The bill’s proponents project it will raise more than $2 billion for Medicaid in the next biennium.

“Without action, we risk losing billions of dollars in federal funding, destabilizing hospitals, and leaving a significant shortfall in our Medicaid budget,” Sen. Mark Meek, D- Oregon City, said in support of the bill.

About one in three Oregonians gets free preventative and emergency health care through the Oregon Health Plan, and more than half of the children in the state are enrolled in the program.

Minority Leader Daniel Bonham, R-The Dalles, voted against the bill but said he hoped it would advance in spite of his opposition.

Bonham cast his vote, he said, to draw attention to the uneven impact of the bill on different payers and on Oregonians. “The devil is in the details,” he said.

Hospitals, he noted, effectively do not pay the tax, since they collectively receive back payments through the federal Medicaid program that equal the money the state collects from them.

By contrast, the insurance programs taxed by the state don’t receive an equivalent direct benefit, Bonham noted, and said they pass on the cost of the tax in the form of higher premiums for people buying insurance plans.

Bonham and other Republicans had proposed making insurance policies issued to individuals, school districts and small employers exempt from the tax.

“Not to diminish the global budget, but to hold certain people harmless,” Bonham said.

They had also proposed including large companies that self-insure in the tax. A 1974 law exempts employer benefit plans from most state regulation.

In the end, Democrats declined to adopt any of the amendments to the bill that Republicans had proposed, but committed to continue conversations across the aisle about how to improve implementation of the tax.

Republican Sens. Dick Anderson, R-Lincoln City, Fred Girod, R, Stayton, Mike McLane, R-Burns, Todd Nash, R-Enterprise, Bruce Starr, R-McMinnville, and Suzanne Webber, R-Tillamook joined the Democratic majority and voted for the bill.

News Source : https://www.opb.org/article/2025/03/17/oregon-health-care-medicaid-senate-politics-insurance/