Health insurance shouldn't be taxed
I'm disappointed to see your Sunday editorial, not because you don’t support a referendum, but because I don't think your editorial board fully understands how egregious HB 2391 really is.
To be clear: In 2011, I voted to create our Oregon’s Medicaid CCOs, and generally support the Medicaid program and its expansion. I do not, however, support taxing other people's health care to do this.
HB 2391 isn't just about a provider tax as you described it. It's a massive giveaway to insurance companies.
You'd be surprised to learn there's a provision in HB 2391, Section 8, expressly allowing insurance companies to pass on that tax to ratepayers. Ratepayers in Oregon are getting double-digit rate increases next year — as much as 14 percent, and that's before the 1.5 percent tax that Democrats allowed to be passed along.
There is a hospital assessment in the bill, which is our current practice of shifting money from the hospitals to the state to obtain match dollars from the feds to give back to hospitals. It's a shell game of moving money. However, there's a new 0.7 percent hard tax on hospitals. Ask the CFO at Rogue Regional Medical Center about this new tax. It will mean rising costs of services. Only the assessment has to go back to the hospital directly. The new tax, which required a three-fifths vote of the Legislature, can be used for any purpose once it’s hardwired into our statute. Under a recent judicial decision, it can also be expanded in the future without a three-fifths vote.
HB 2391 also includes a tax on PEBB insurance, our state-run health plan for public employees. The state will pull that money from the general fund for state workers, but universities like Southern will be forced to cost-shift that burden to students in their tuition.
There's also a 1.5 percent tax to your local Medicaid provider. This hardwired tax doesn’t have to be spent for Medicaid. Check with your local CCO. Are they OK with a tax that can be supplanted into the general fund for other things unrelated to Medicaid? Since the money for the tax comes from their reserves, it means less resources for providing Medicaid services.
Then there’s the 1.5 percent tax on insurance premiums. Who pays that?
- College students who have to buy university plans if they can't prove other health coverage
- Individuals who buy their own insurance.
- K-12 schoolteachers, because school district plans are in the large group coverage market. This will cost the K-12 budgets in our state $25 million next biennium.
- 15,500 small businesses and employers like Head Start.
Who won’t pay? Large corporations and any organization that can self-insure.
Not only did I chief sponsor the CCO bill you referenced, but I also chief sponsored two different bills that would have worked on transforming health care, ensuring that people who get a taxpayer plan would have it funded. The Democratic plan also took $50 million we had in an expiring health care fund and kicked it back to insurance companies. I was chief sponsor of a bill to kick that to Medicaid instead.
The fact is, none of those bills were given serious consideration because they don't benefit the people who write big campaign checks to Democratic lawmakers. There's no incentive to reform health care when the industry is massively profiting from Medicaid and they are exempted from the tax.
I fundamentally believe key human needs — housing, food, health care — which are so critical, should not be taxed. According to my Democratic colleagues, health care is a “basic human right” — yet they had no problems passing a bill to tax it.
Voters deserve to vote on whether we should so dramatically change our system by allowing a sales tax on their health care. These taxes will be passed on to them, while organizations making really big money from the system enjoy the status quo.
Having grown up in the Medicaid system, I support people having access to this care — just not on the backs of others who are struggling to keep their own care.
— Rep. Julie Parrish, R-West Linn, represents House District 37 in the Oregon Legislature.