5 Things Oregon: PBM reform efforts, Gov. Kotek’s budget, Universal healthcare discussions


Eli Kirshbaum


Our first Oregon newsletter of 2023 includes an effort underway to regulate PBMs in the state, healthcare highlights from Gov. Kotek’s first state budget proposal, recent discussions about whether to pursue universal health coverage expansion in the legislature, and more.

Thank you for reading!


Eli Kirshbaum
State of Reform

1. Lawmakers focus on PBM regulation

Following some rigorous deliberation in the House healthcare committee last month, legislators have yet to vote on a bill package intended to further regulate PBM practices in Oregon. The package includes bills to prevent PBMs from imposing fees on rural pharmacies at the point of sale, prohibit PBMs from restricting coverage of medications that are obtained by non-participating pharmacies, and prevent unfair PBM practices concerning reimbursement for medications.

Harmful PBM practices brought up in the committee include a lack of transparency on rebates that can ultimately contribute to higher drug prices, over-consolidation in the PBM industry, and the discriminatory practice of “white bagging.” Ralph Magrish, executive director of the Oregon Prescription Drug Affordability Board, explained the board has made a recommendation to require PBMs to report aggregated rebate amounts, along with other payments from manufacturers, to the state’s drug price transparency program. The committee discussed seven additional PBM-related bills at a subsequent hearing—all of which are also awaiting a vote.


2. Gov. Kotek’s budget proposal prioritizes housing

In her $32.1 billion FY 2023-2025 budget proposal, newly elected Gov. Tina Kotek recommends a total of $34.5 billion ($5.4 billion coming from the General Fund) for the Oregon Health Authority and $17.8 billion ($5.3 billion coming from the General Fund) for the Department of Human Services. These represent total funding increases of 6.5% and 3.8%, respectively, compared to the current FY 2021-2023 budget.

One of Kotek’s biggest priority areas is housing and homelessness, aiming to promote housing stability with an allocation of $172.2 million to provide rapid rehousing resources and connections to rent assistance. The governor also calls for $130 million to create new permanent supportive housing units and $73 million to create an ongoing homelessness prevention program. Another focus of the budget is behavioral health, with proposed funding including $127.4 million to continue the 30% Medicaid rate increase to behavioral health worker wages.


3. What They’re Watching: Jon McDaid, Oregon Health Authority

Oregon Health Authority Principal Executive Manager Jon McDaid says he is focused on ensuring OHA gathers input directly from community members to inform the development of Medicaid policy. During our 2022 Oregon State of Reform Health Policy Conference, McDaid explained the importance of helping members navigate the healthcare system, supporting them in setting up appointments and answering their questions about their options.

He said part of this is also helping Oregon Health Plan members for whom English isn’t their first language. The state offers interpreter services to help these individuals schedule the services they need. He acknowledged, however, that difficulties can still arise during this process, which OHA makes sure to address for individual members.


4. Effort to make Oregon first state with universal healthcare coverage continues

Oregonian healthcare advocates have long been fighting to establish a universal healthcare system in the state. The Joint Task Force on Universal Health Care—created in 2019—produced a blueprint for accomplishing this goal in September, and voters approved a ballot measure last year that constitutionally requires the state to ensure quality healthcare coverage for all residents. The most recent effort is Senate Bill 704, which outlines a plan for the state to establish universal coverage and was the subject of abundant testimony in its first committee hearing on Tuesday—the majority of which was in support of the legislation.

Among the many favorable testimonies was Silverton Mayor Jason Freilinger, who emphasized the policy’s impact on business owners, saying universal healthcare would drastically reduce employers’ expenses for employee health coverage. “I’m not a small business owner anymore, partially because of healthcare,” he said. In his opposing testimony, OAHU’s Tom Holt claimed the bill made “heroic assumptions” and was “ultimately destined to crash and burn.” He argues that the health sector should instead continue to focus on “incremental” improvements, emphasizing public-private collaboration. Lawmakers have yet to take action on the bill.


5. Health bills we’re watching

Native American medical students in Oregon could soon be paid to practice in tribal areas if lawmakers approve SB 469. During a recent hearing on the bill—which hasn’t moved out of its committee of origin yet—advocates said the Indian Health Scholarship Program would increase care access in “acute” Native American reservations, with Coquille Tribe member Michael Mason testifying that it would particularly help address gaps in dental care at tribal health clinics.

Other legislation we’re watching include a bill to require DHS to provide certain services to individuals with brain injuries and create a brain injury advisory committee, and two bills that would compensate parents for taking care of their disabled children. In an effort to reduce fentanyl overdose deaths, lawmakers are considering legislation to make overdose response tools including fentanyl test strips more accessiblerequire OHA to electronically record information about overdose deaths, and lift prohibitions on the use of certain testing equipment to respond to overdoses.