Salem – Oregon’s health officials told the Senate Health Care Committee on Sept. 9 that the state will need to find nearly $1.3 billion over the next four years to keep the Oregon Health Plan operating under the new 2025 federal tax and spending law passed by the Trump administration.
Projected deficits and work‑requirement costs
Interim Oregon Health Authority director Fariborz Pakseresht, Medicaid deputy director Vivian Levy, and Oregon Department of Human Services deputy director Jillian Johnson presented a budget outlook that shows a $421 million shortfall for the first two‑year cycle and a larger $868 million gap for the following two years.
“Even with our best work, there are going to be people who lose coverage,” Pakseresht said, emphasizing the seriousness of the projected shortfall.
Federal law’s impact on state Medicaid
The 2025 federal tax and spending law, championed by President Trump, slashes roughly $1 trillion in Medicaid spending over the next decade and adds stringent work‑requirement and eligibility‑review provisions. Oregon has already spent about $110 million on additional staff to meet the new eligibility‑review demands.
To help residents meet the new requirements, the state is upgrading technology so people can upload payroll documents for rapid verification. Officials also plan to enroll eligible individuals in the Supplemental Nutrition Assistance Program (SNAP) and the Temporary Assistance for Needy Families (TANF) program, which have similar verification rules.
Work requirements and coverage risk
The law requires adults aged 19 to 64 to complete 80 hours per month of work, volunteering, or education. By late September, the agency expects to notify roughly 600,000 people of these obligations. Parents or caregivers of children under 14, as well as individuals with severe medical conditions, are exempt.
Levy warned that the increased paperwork and six‑month eligibility reviews—replacing the previous two‑year cycle—could cause many to lose coverage. Researchers at Princeton University estimate that about 200,000 Oregonians could lose Medicaid benefits as the law rolls out.
Immigration status changes
The federal changes also strip certain legal immigrants—refugees, asylees, and survivors of domestic violence or human trafficking—of eligibility for Medicaid and SNAP. The state plans to move roughly 7,000 affected individuals into the Healthier Oregon program, which uses state funds to provide coverage for low‑income residents who are ineligible for federal benefits.
Oregon is currently the only state offering such a program without enrollment restrictions for adults and children lacking permanent legal status, a distinction highlighted by the Kaiser Family Foundation.
Legislative response
State Sen. Deb Patterson (D‑Salem) criticized the federal government for casting doubt on states’ ability to obtain “good‑faith” waivers that would delay work‑requirement implementation, suggesting that fairness should be reciprocal.
Sen. Lisa Reynolds (D‑Portland), also a pediatrician, accused the federal administration of using administrative burdens as a tool to reduce Medicaid enrollment and fund tax cuts for the wealthiest Americans, calling the situation “an upside‑down world.”
What’s next for Oregon?
Lawmakers have not yet outlined a concrete plan to bridge the projected budget gaps. The health authority continues to explore technology upgrades and partnerships with nutrition assistance programs to mitigate the impact on Oregonians who rely on Medicaid.
As the state grapples with the financial strain, the debate underscores the tension between federal fiscal policy and state responsibility for vulnerable residents.
Original reporting: Homepage – Lookout Eugene-Springfield — read the source article.
