The Oregon Health Plan--lessons for the nation. First of two parts.

Under Oregon’s 1989 legislative package, the Medicaid portion of the Oregon Health Plan was only one of its two critical pieces. The other was the requirement that employers provide insurance to employees, with the prioritized list as the minimal benefit package. Small businesses lobbied for the repeal of this part of the legislation, and on January 1, 1996, it died. Gone was the hope of nearly universal health insurance in Oregon, with the prioritized list used for persons with incomes above the federal poverty level as well as Medicaid beneficiaries. With the defeat of the requirement that employers provide insurance, Governor Kitzhaber sought alternative ways to insure the remaining 360,000 uninsured Oregonians. In November 1996, voters approved the governor’s proposal for a 30-cent increase in the tobacco tax to generate additional funds for the expansion of the Oregon Health Plan. The funds are expected to allow 25,000 children to be added to the Oregon Health Plan and to provide an additional 21,000 people with state subsidies to purchase private health insurance. Kitzhaber’s strategy is to shrink the ranks of the uninsured step by step; the goal is to reduce the proportion of uninsured persons to 5 percent, which may be as low a level as a nonmandatory system can achieve. The use of state subsidies for private insurance has serious flaws. The insurance policies may have high deductibles and limited benefits, and the prioritized list does not apply to these policies. The Oregon Health Action Campaign, a coalition of 110 seniorcitizen, community, church, and labor organizations that has been a supportive critic of the Oregon Health Plan since its inception, believes that the subsidies will be inadequate to allow low-income families to obtain private health insurance.21 The coalition had proposed that the new enrollees receive a broad benefit package determined according to the same prioritized list that governs health services for current enrollees in the Oregon Health Plan.