Drazan and Kotek stay silent on $421 million Oregon Medicaid shortfall
With state budgets due in December and February, neither gubernatorial candidate has offered a specific plan to cover the funding gap created by federal cuts.
By Javier Sanders ·
Oregon faces a $421 million hole in its Medicaid budget for the upcoming cycle, yet neither of the state's two top gubernatorial candidates has publicly detailed a plan to close it.
The funding gap stems from a tax and spending bill passed by the Republican majority in Congress last year. Federal rules now require Oregon to trim its healthcare spending to balance the loss in federal aid. The shortfall is expected to double in the following two years, reaching an estimated $868 million as stricter funding rules take effect.
The cuts could impact one in three Oregonians and half of the state's children who rely on the Oregon Health Plan. As the incoming governor, the winner of this election will oversee the budget process for the next four years.
Incumbent Governor Tina Kotek must present her proposed budget to the state Legislature on Dec. 1. If Republican challenger Christine Drazan wins, she will have the authority to revise that budget, with her own proposal due to the Legislature on Feb. 1.
Despite the size of the gap, both campaigns have largely avoided specific proposals. Kotek has convened an advisory group to develop options for closing the $421 million deficit. Her staff told the group to prioritize keeping people enrolled and to look for savings in benefits, administrative costs, and provider pay. The group produced a list of more than 40 options, but no consensus emerged.
Kotek has publicly supported only one of these options: centralizing the approval and purchasing of prescription drugs. Her advisors estimated this move could save the state approximately $24 million over 18 months. This leaves nearly $400 million in unaddressed spending cuts.
When asked about her specific approach to the shortfall, Kotek’s campaign provided a written statement rather than detailed answers. “My priority in the upcoming budget is to provide access to high-quality healthcare to as many Oregonians as possible with the best benefits possible,” Kotek said. She added that she intends to grow the healthcare workforce while defending the Oregon Health Plan.
Drazan has been even quieter on the issue. In debates and interviews, she has focused on cutting state bureaucracy and reducing regulations. On Oct. 7, she cited the Oregon Health Authority and its 6,000 employees as a target for efficiency. “I will commit that our government will understand its core mission and its core role,” Drazan said. She argued that cuts should be made where the government is trying to be “all things to all people.”
Drazan’s stance is complicated by her voting record. Last year, as minority leader in the Oregon House, she voted against extending a 6% tax on hospitals and a 2% tax on certain health insurance plans. These taxes are a critical part of how Oregon pays for the Oregon Health Plan. Kotek has attacked Drazan for this vote, calling it a move to defund the program. Drazan defended her position, claiming the taxes drove up healthcare costs and insurance premiums.
The Hospital Association of Oregon, which lobbied for the taxes, donated $250,000 to Drazan’s campaign in 2022. In the current race, the group has given $50,000 to Kotek and has not donated to Drazan. Neither candidate answered detailed questions about how they would handle the Medicaid budget gap or whether they would pause enrollment for undocumented immigrants, a program that currently covers 14,000 children and 73,000 adults.
