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Battle brewing over Oregon Health Plan Thursday Feb 2, 2017 at 2:43 PM Feb 2, 2017 at 2:43 PM Vickie Aldous Mail Tribune @VickieAldous A battle over health care is brewing in Oregon after the state's expansion of health insurance coverage blew a $1 billion hole in the state's budget. Democratic Gov. Kate Brown is proposing even more spending on health care, while Democratic leaders in the Legislature are saying cuts to the Oregon Health Plan and other programs are inevitable without additional taxes and other revenue increases. Meanwhile, some conservatives are calling for Oregon to opt out of the nationwide expansion of subsidized health insurance coverage triggered by passage of the 2010 Affordable Care Act, also known as Obamacare. Adding to the uncertainty, President Trump has called on Congress to repeal and replace the Affordable Care Act. In Jackson County, approximately 60,000 children and adults — more than one in four county residents — is now covered by OHP. Statewide, a quarter of Oregonians receive the insurance subsidized by the state and federal governments.  In her inaugural address, Brown said a chief obstacle facing the state is a projected $1.7 billion budget deficit. "Three-fifths of this deficit is the cost of expanding health care to all Oregonians," she said. Another fifth is caused by unfunded public employee pension obligations, and the remaining fifth was triggered by voters' passage of three ballot measures in November 2014 that called for increased spending in areas like vocational education, Brown said. Brown said Oregon's health care expansion has brought coverage to 95 percent of adults and 98 percent of children. She wants no cuts to eligibility or services offered by the Oregon Health Plan, and is calling for an additional $55 million in spending to extend coverage to every child in the state. The conservative Cascade Policy Institute blasted Brown's proposal in a report released this week called "Facing Reality: Suggestions to Balance Oregon's Budget Without Raising Taxes." The report identifies $1.3 billion in savings to help close the state's $1.7 billion budget deficit. The institute said Oregon could save $360 million by opting out of the Affordable Care Act health coverage expansion, and another $55 million by rejecting Brown's "Cover All Kids" initiative. "With many portions of the ACA likely to be reformed or replaced by the next Congress, Oregon can see immediate budget savings by opting out of the Medicaid expansion in the 2017-19 biennium," the report said.  The report noted Oregon is shouldering a growing share of Affordable Care Act costs. "In the first years of the ACA, the federal government paid all of the costs to the states of expanding Medicaid. Beginning in 2017, federal support will be reduced, decreasing to 97 percent in 2017 and eventually 90 percent in 2020 and thereafter," the report said. "Although the federal government pays a large portion of the costs of the Medicaid expansion, the huge costs of Medicaid mean even a small increase in costs can have big impacts on state budgets." In addition to health coverage cuts, the institute is recommending public employee pension caps, Department of Human Services cuts, a Department of Administrative Services hiring freeze and no funding for the voter-approved vocational education measure. While Brown is calling for increased health care spending, she is proposing cuts elsewhere, including for wildland firefighting and a state psychiatric hospital in Junction City. She would increase taxes on alcohol and tobacco and spend less on new education programs than the voter-approved measure intended. Meanwhile, the Democratic chairs of the Joint Ways and Means Committee proposed a budget that would require cuts of up to 28 percent to the Oregon Health Authority — which oversees the Oregon Health Plan — if the state does not raise taxes and find other revenue. Spending on education at all levels, public safety and the Department of Human Services would also be trimmed.  State Sen. Elizabeth Steiner Hayward, co-chair of the Ways and Means Committee for Human Services, said opinions may differ on how to get there, but the Legislature wants to find ways to protect health care coverage. "The vast majority of legislators believe having as many Oregonians as possible with health care coverage is a good thing," she said. She said adults who have their health care needs met are better able to work, and healthy kids do better in school. "I don't hear people calling for stepping away from the Medicaid expansion. Every district has had a significant percentage of its population benefit from the Medicaid expansion," said Steiner Hayward, who represents the northwest Portland and Beaverton areas. The number of Jackson County residents on OHP skyrocketed from 30,000 four years ago to about 60,000 after passage of the Affordable Care Act. Steiner Hayward said the health care expansion has been positive for Oregon's economy. She said the state would lose 47,000 jobs if the Affordable Care Act were completely repealed. "We've expanded our health care workforce, which creates living-wage jobs and career paths for young people," she said. The Commonwealth Fund, a foundation supporting health care system improvements, released a January report saying 45,000 jobs would be lost in Oregon if key provisions of the Affordable Care Act are repealed. Of those job losses, 18,100 — or 40 percent — would come directly in health care, with the remainder in other sectors, including construction, real estate, retail, finance, insurance and government. Steiner Hayward said coverage cuts would cause more people to seek costly care in emergency rooms rather than at doctors' offices. More kids would miss school, and more adults would miss work. She said legislators must think long term and prepare Oregon to shoulder a larger share of the health coverage expansion. That may include identifying cuts that are the least harmful and looking for ways to increase revenue. "Everybody has to be prepared to give something," Steiner Hayward said. — Reach staff reporter Vickie Aldous at 541-776-4486 or [email protected]. Follow her at www.twitter.com/VickieAldous.