Oregon Surpasses Struggles of Early Reform and Develops a Road Map for Future Success

Health care reform is nothing new to Oregon. In the early 1990s, the state launched a forerunner to today's state-based efforts, the Oregon Health Plan (OHP). In its original form, the OHP aimed for nearly universal health coverage by mandating employers to provide health insurance for employees and expanding Medicaid. It addressed both the lack of insurance among low-income residents and the irrational denial of life-saving treatment even while coverage provided less effective therapies for less serious conditions, according John Kitzhaber, MD, the emergency department physician and state senator who authored the plan (1).

Kitzhaber went on to oversee its implementation as governor from 1995 to 2003, but the OHP ultimately did not realize its potential. The employer mandate to drive the goal of universal health coverage was never implemented after business owners lobbied against it. Meanwhile, the Medicaid expansion effort stalled until 1993, when the Centers for Medicare & Medicaid Services (formerly the Health Care Financing Administration) finally granted a necessary Medicaid waiver to expand coverage to uninsured persons with incomes below 100% of the federal poverty level.

After the Medicaid waiver was granted, the state found enough funding to provide health insurance to 120 000 new members. At the OHP's peak enrollment period in 1996, the proportion of Oregon residents without health insurance dropped from approximately 18% to 11%.

Before long, the Medicaid expansion portion of the OHP struggled. The cost grew more than 50% between 1993–1995 and 1999–2001, according to some reports. Meanwhile, unemployment rose and state revenues fell during an economic downturn (2). A state law levying a tax on hospitals, managed care programs, and nursing homes did not adequately cover the rising cost, nor did new requirements for some OHP recipients to pay monthly premiums or small copayments for outpatient services and some drugs. …