Capital Bureau

SALEM — Legislation designed to pay for Oregon’s expanded Medicaid program through a tax on providers and insurers got a step closer to the ballot Wednesday.

State Rep. Julie Parrish, R-Tualatin/West Linn; Rep. Cedric Hayden, R-Fall River; and Rep. Sal Esquivel, R-Medford, filed paperwork to start collecting signatures to get a tax on health care providers on the ballot.

Oregon already assesses certain urban hospitals 5.3 percent of net revenues in order to help pay for the costs of the Oregon Health Plan, the state’s version of Medicaid, the federal program that provides health coverage for the poor and other qualifying groups.

Legislation approved last month would continue the assessment, create a “true tax” of .7 percent of net revenues, create a new 4 percent assessment on rural hospitals and a 1.5 percent tax on insurers.

Taxing providers allows states to draw substantial federal funds to pay for Medicaid. According to the Kaiser Family Foundation, all states except Alaska had some kind of provider tax in the 2016 fiscal year.

In Oregon, the provider tax is expected to collect more than $600 million in the next two years, and to leverage nearly $1.9 billion in federal funds to pay for Medicaid.

Health care providers receive a portion of the total Medicaid funds in exchange for providing care to Medicaid patients.

If the petitioners collect the required 58,789 signatures in about three months, the legislation will “freeze” and parts of it will not be implemented as planned. The tax on insurers, for example, would not start on Jan. 1, 2018, as the legislation outlines.

Parrish is critical of that aspect of the bill, and said Wednesday it amounted to a “sales tax on health care” for people who buy insurance on the individual market.

Esquivel voted for the provider tax — the lone Republican to do so and a key vote supplying the required three-fifths majority approval in the House.

Esquivel said in a prepared statement Wednesday that although he voted for the provider tax, he was concerned about recent initiatives in health care led by Democrats, such as mandating coverage of reproductive health services for Oregon residents, regardless of immigration status. That bill was passed by the Legislature Thursday.

“I supported (the provider tax bill) because I think those who qualify under the federal law should have a way to see the doctor,” Esquivel said. “It was a hard vote, but it needed to be done. What’s ensued since is a major overreach by the House Democrats to drive new costs and expand programs when we can’t fully fund programs for our veterans and citizens. That’s not how those tax increases were presented to me.”

Oregon Gov. Kate Brown, a Democrat, signed the provider tax legislation Monday. In a statement Wednesday, she called it “critical to protecting the health care coverage of Oregonians and stabilizing the commercial insurance market.”

“Any delay would jeopardize the care of more than 1 million Oregonians who rely on the Oregon Health Plan, drive up costs of Oregonians who buy their insurance on the individual market, and limit health care options for rural Oregonians,” Brown said.

It’s not yet clear when the tax could go to the ballot: the House is scheduled to vote Thursday on when to hold the election. Democrats are pushing for a January election to decide the issue sooner, a move that Parrish opposes.

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