Gridlock, partisan politics, empty wallets, and the blame game are usually associated with life inside the D.C. "Beltway," but they have surfaced recently in the state of Oregon and brought efforts to implement the controversial Oregon Health Plan (OHP) to a virtual standstill. In a 19 March 1993 decision greeted with much enthusiasm by state political leaders, the medical community, and health care activists, the Clinton administration approved a Medicaid waiver to permit implementation of the OHP. The core of the plan restricts access of Medicaid patients to some health services in order to provide a basic package of benefits for some 120,000 Oregonians currently without health care insurance. The Bush administration had denied the Medicaid waiver in August 1992 because of concerns that quality of life assessments were embedded in a prioritized list of 688 health services, and that the priorities thereby might result in discrimination against the disabled and violate the Americans with Disabilities Act. A revised version, submitted in December 1992, attempted to eliminate the quality of life methods and guaranteed funding for 568 of the 688 services, including such previously excluded conditions as low birthweight babies, cirrhosis of the liver, and chronic bronchitis.
After persistent lobbying by the Oregon congressional delegation and Gov. Barbara Roberts, the approval of the waiver was announced by Donna E. Shalala, secretary of health and human services. Shalala's approval, which was subject to twenty-nine conditions (primarily "technical" and "reporting" issues), allows the OHP to proceed for a five-year "experimental" period, beginning in January 1994. Under the OHP the income level for Medicaid eligibility would be raised from its current 50 percent of the federal poverty index to 100 percent ($14,343 for a family of four in 1992), and expand the total number of Medicaid recipients in the state from 240,000 to 360,000. The waiver approval also triggers a state version of a "pay or play" program, in which employers will be mandated to provide health insurance for employees or be subject to a new payroll tax. Employers who "play" must offer health plans substantially similar" to the Medicaid priority list and bear at least 75 percent of the cost for employees and 50 percent of the cost for their dependents.
Among the more substantive conditions of federal approval, Shalala requested that the state submit within 60 days (18 May) another priority ranking to ensure that persons with disabilities are not potential subjects of discrimination. For example, the OHP will not be permitted to consider "functional limitations" (such as inability to walk) or impairments that persist after treatment as a measure of a treatment's "effectiveness." The state was also asked to consider whether infertility (currently excluded from coverage) should be covered as a "disability." And Oregon was also required not to rescind its guarantee of funding up to the level of the 568 services without prior approval from HHS.
Oregon's political leaders were unanimous in asserting that Oregon was blazing a new path for the nation to follow as it takes up reform proposals at the national level to be issued by Hillary Rodham Clinton's task force. Rep. Ron Wyden (D-Ore.), a principal advocate of the OHP before the Clinton administration, remarked: "Any good national health bill has to contain features of the Oregon plan, . . . universal coverage, preventive health care, cost containment through managed care, extensive use of nonphysician providers, and an emphasis on what's medically effective for our citizens" (Washington Post, 20 March 1993). However, since the granting of the waiver, the OHP has looked like it would be an exemplar only of the obstacles that any national proposal might face.
A major problem with implementation that has emerged is financial. The costs of the OHP over the five-year period are estimated at $6. …