Vanderbilt Law Review

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Americans currently spend $733 billion, or 12.3 percent of the Gross National Product (GNP), per year on health care. This is nearly twice what Americans spent on health care just seven years ago. Health care is also one of the fastest growing major items in the federal and state budgets. Not surprisingly, governments, businesses, and individuals all are having difficulty finding resources to meet the increasing costs of health care. As a result, the health care delivery system has cut costs by denying some people access to adequate health, care services. Currently, an estimated thirty-seven million Americans are uninsured. In addition, the number of people covered by government-sponsored and employer-sponsored insurance has decreased, and skyrocketing costs are likely to lead to further reductions in coverage.

To cope with the rising number of uninsured residents and to control skyrocketing costs, the State of Oregon recently passed the Oregon Basic Health Services Act (OBHSA). The most controversial aspect of this legislation package is Senate Bill 27. If the Bill, which still must survive the federal waiver process, becomes effective, it will extend Medicaid benefits to all Oregon residents whose income does not exceed the Federal Poverty Level (FPL). Presently, only about 120,000 of the 320,000 people whose income is below the FPL qualify for Medicaid in Oregon.' OBHSA is designed to reduce the cost of extending Medicaid by limiting, or rationing, the services Medicaid will cover. Oregon has created a prioritized list of medical services and will fund as many services, in the order of prioritization, as its budget allows.'

OBHSA also mandates employer-sponsored health insurance programs by 1994. Employer-sponsored insurance should provide coverage to the 330,000 working Oregon residents who presently do not have health insurance and fail to qualify for Medicaid. The insurance must provide at least the same benefits as those funded by the state.'"