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Hospital tax extension clears Legislature

Four-year bill, which recoups federal money for low-income health care, goes to Gov. Brown.

Federal money will continue to come to Oregon to pay for health care for low-income people as a result of a hospital tax extension that won final legislative approval Tuesday.

The Senate passed a four-year extension of the tax on a 29-1 vote Tuesday. House Bill 2395, which the House passed last week, goes to Gov. Kate Brown.

The tax applies only to the 28 largest hospitals in Oregon, and the target rate is 5.3 percent of net patient revenues.

“It is a reasonable package that was brought to us with broad support,” said Sen. Jackie Winters, R-Salem, who led the Legislature’s human services budget subcommittee when the tax was first instituted in 2003.

Winters said almost one million people — close to 25 percent of Oregon’s population — are covered by the Oregon Health Plan, which in 2014 was expanded through the federal Affordable Care Act.

The tax is projected to raise $880 million in the next two-year cycle, which starts July 1, and would recoup an estimated $2.4 billion in federal funds from Medicaid, the joint federal-state program that pays for health insurance for low-income people.

For the 2017-19 budget cycle, the tax is projected to raise just under $1.1 billion, which would recoup $2.9 billion in federal funds.

The tax expires on Sept. 30, 2019.

Without the tax, Sen. Alan Bates, D-Medford, said Oregon would have trouble paying for health care and balancing its budget.

Hospitals get back at least the amount they pay in provider taxes.

According to the National Conference of State Legislatures, only Alaska did not levy some form of provider tax in 2013-14.

The lone dissenter on Tuesday’s vote was Sen. Brian Boquist, R-Dallas.


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