House approves Oregon hospital, nursing home tax

Oregon House approves hospital, nursing home tax to pay for low-income health care

Associated Press

SALEM, Ore. (AP) -- The Oregon House voted Tuesday to extend a tax on hospitals and nursing homes that provides a big portion of the state budget for health care.

The 54-5 vote sends the measure to the Senate, where Republicans are threatening to block it. GOP lawmakers want to use the bill as a bargaining chip to extract steeper cuts to public-employee pensions.

Even if all 16 Senate Democrats support the bill, at least two Republican votes will be needed to reach the supermajority required to raise revenue, and the so-called provider tax could be the last bit of leverage for the GOP.

Gov. John Kitzhaber released a statement calling for "swift action" in the Senate.

"This bill is an essential part of the overall state budget and a critical step in ensuring that we deliver efficient, effective services for seniors and Oregon's most vulnerable citizens," Kitzhaber said.

The measure would extend a decade-old tax on hospital revenue for two more years. The tax revenue, estimated to be $745 million, is ultimately returned to hospitals, but it generates $1.3 billion in federal matching funds that help pay for the Oregon Health Plan, the state's Medicaid program that provides health coverage for low-income Oregonians. Some of the federal money also returns to hospitals in the form of payments for services provided to Medicaid patients.

The existing 4.3 percent tax rate would be increased by 1 percentage point, generating new revenue to help reward hospitals that meet certain performance metrics.

The nursing home tax would be extended until 2020. Twenty-five nursing homes that are currently exempt would have to begin paying it.

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