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Health insurers in Oregon are campaigning for a ballot measure that could keep a 1.5% Medicaid program funding assessment on their premiums in place.

Voters in the Beaver State are getting ready to vote on a Medicaid funding tax referendum, Measure 101, Jan. 23. 

If voters approve Measure 101, then Oregon will move forward with plans to impose the 1.5% assessment on Oregon health insurers’ premiums, and a 0.7% assessment on the net revenue of some Oregon hospitals.

Oregon hopes to raise $210 million to $320 million of its own Medicaid funding with the assessment, and use that revenue to attract $630 million to $960 million in federal Medicaid matching funds, according to a special election pamphlet prepared by the Oregon secretary of state’s office.

If the measure fails, and state lawmakers are unable or unwilling to find alternative funding, then Oregon’s Medicaid program could lose as much as $1.3 billion in total funding for the period from 20017 through 2019. About 1 million of Oregon’s 4.1 million residents have Medicaid coverage.

Oregon’s Medicaid program used a total of about $8.4 billion in federal and state funding in fiscal year 2016, according to analysts at the Henry J. Kaiser Family Foundation.

(Related: Affordable Care Act ‘Repeal and Replace’: A Political Autopsy) 

The Affordable Care Act helps states pay to open their Medicaid programs to low-income childless adults with income near the federal poverty level. Oregon officials have been planning to use the new assessment on health plans and hospitals to pay its share of the Medicaid expansion bills.

Oregon state lawmakers have already approved the assessment program.

Three Republican state lawmakers in Oregon — Julie Parrish, Sal Esquivel and Cedric Hayden — pushed to give voters a chance to vote on the assessment because they think policymakers should come up with a better way to fund the Medicaid expansion program.

Approving the assessment “imposes a tax on many of our local hospitals,” Parrish says in a statement included in the special election pamphlet. “They will be forced to the pass the tax increases onto you!”

The assessments will also hurt Oregonians who are paying full price for coverage for themselves or their employees and are not getting federal Affordable Care Act premium subsidies, Parrish says.

The National Federation of Independent Business is siding with the assessment opponents on Measure 101.

“Unless voters reject Measure 101, it will become even harder, and possibly even cost prohibitive, for Oregon’s small family businesses to offer affordable health care coverage to their employees!” NFIB says in the statement it put in the pamphlet.

The assessment is especially unfair to employers that are paying for health coverage for their workers because of the Affordable Care Act employer mandate, NFIB says.

—Read Judge Backs Health Insurer in ACA Payment Suit on ThinkAdvisor.

— Connect with ThinkAdvisor Life/Health on Facebook and Twitter.

The author predicts that the ACA system will survive, but not thrive.

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