Text Size:   A+ A- A   •   Text Only
Site Image

DHS news release

The following news release was issued by the office of Governor Theodore R. Kulongoski

August 17, 2004

Contact: Marian Hammond, (503) 378-6169; Lynn Read, DHS, (503) 945-5767

Federal government approves hospital tax to support Oregon Health Plan

Federal officials today authorized Oregon to begin levying an industry-supported tax on selected Oregon hospitals to help support a scaled-down Oregon Health Plan. Approval permits the state to continue offering the Health Plan's Standard benefit package to an estimated 24,000 low-income adults who otherwise would not qualify for Medicaid coverage. Earlier, the state received federal approval to levy a provider tax on 31 managed care insurance plans that serve OHP clients.

Legislators last year approved the "provider taxes" on managed care plans and hospitals to support benefits for Standard enrollees.

"I am gratified that the hospitals and managed care plans agreed to help us continue insuring people who otherwise would be forced to rely on costly emergency room care or to simply go without," said Gov. Ted Kulongoski. "These public-spirited partners are helping us to maintain health care coverage for as many Oregonians as possible."

Kulongoski said coverage is important not only to those directly affected, but also to Oregonians to whom charity care costs otherwise would be shifted in the form of higher medical bills and health insurance premiums.

The Standard benefit package, which closed to new enrollments on July 1, now covers about 56,000 adults. As a result of the February voter rejection of a temporary income-tax increase contained in Ballot Measure 30, OHP Standard no longer receives state general fund support. The Oregon Department of Human Services accordingly has been directed to reduce that number to approximately 24,000 by next June 30. Without approval of the hospital tax, that number could have been further reduced
to 17,000.

The hospital tax will be on urban hospitals, and federal approval was needed because the tax will exempt rural (so-called Type A and Type B) hospitals and the Oregon State Hospital. The dollars raised by the tax on hospitals and managed care facilities are eligible to be matched by federal Medicaid funds. The federal government will match every dollar the state raises with $1.50.

The Standard benefit package covers doctor visits, prescription drugs, emergency dental, x-rays, limited medical supplies, outpatient mental health and chemical dependency treatment, and a limited hospital benefit. Medical supplies and the dental, mental health and chemical dependency benefits, cut last year to help balance the state budget, were restored Aug. 1.

Meanwhile, the Health Plan's Plus benefit package, which covers approximately 300,000 people who are disabled, blind, aged, receiving public assistance or who are otherwise eligible for traditional Medicaid, continues to receive both state general fund and federal budget support.