Pacific Source, and now today, Providence Health insurance announced they are exiting the individual insurance market and/or most of the health insurance market in Oregon. These are two of the largest insurers in Oregon.
For those on ACA plans, this is a disaster – it means super high health insurance premiums will rise well into the double digits next year. Again. Rates are expected to rise, on average, by 16% for 2027: Oregon health insurance premiums still headed up 16% despite regulators’ cuts – oregonlive.com (That % is a false number – they compare the rate of a 40 year old this year to a 40 year old next year – but that 40 year old will be 41 years old next year, adding another age related hike on top of the 16%. Monthly premiums for an older couple will run $2,000 to $3,000 per month with sky high deductibles. Obama’s ACA failed to meet any of its original goals except to expand Medicaid.)
Meanwhile, the state of Oregon has proposed to launch its own, state run health system, starting in 2028. Details will be announced in September of 2026.
The Oregon Universal Health Plan (UHP) proposes to provide zero co-pay, zero deductible, comprehensive coverage of health, mental health, dental health and vision – to everyone, at “no cost”.
It would be paid for by doubling the state’s income and capital gains tax – which is currently about 9.9% for most everyone – to 19.9%. Oregon already has among the highest tax burden in the nation without the doubling of the income and capital gains tax. For currently working employees, the theory is taxes would go up, but since companies would no longer run their own health care plans, the companies would pay workers more. That’s the theory but that’s not how market pricing works.
Medicare
The UHP would require ending Medicare for the 18% of state residents who receive Medicare, and all would be rolled into the state plan. This requires the Federal government to direct Medicare funding to the state’s UHP (this requires approval of the Federal government and it is unclear this can be done). The UHP proposal says the UHP would not work unless all Medicare recipients are rolled into the UHP.
While Medicare covers health care nationwide, the UHP would provide coverage only in Oregon, plus emergency coverage when out of state, limited to approved providers in as yet-not-specified national coverage network. If you needed to access a specialist out of state, you would not be covered. You would not be covered for other than emergency care while traveling in the other 49 states.
Medicare recipients would lose access to other benefits they may receive via supplemental Plan G/N type plans, including international coverage while traveling, or that they receive via Medicare Advantage plans. If a Medicare recipient were to move out of state, later, in order to then sign up for a Plan G supplemental coverage plan they would be subject to “medical underwriting” – which is a weird way of saying that pre-existing conditions would not be covered. Thus, those on Medicare today would be locked in to living in Oregon the rest of their lives – or lose access to important medical insurance. For many, the new taxes would add $5,000 to $20,000 to their annual expenses – in exchange for receiving fewer benefits.
We live in Oregon. Having only recently started on Medicare, we are watching this carefully.
Update: Much analysis thinks the UHP’s Medicare issues are likely fatal to the implementation of the UHP. The UHP says it will only work if Medicdare is rolled into the UHP. Ths will require the passage of a law by Congress, Second, the Medigap supplemental policy issues likely require Federal law changes too so that those on Medicare could move to other states wihtout losing coverage for pre-existing conditions. Third, the elimination of nationwide access to providers would be very difficult. Medicare recipients make up about 1 in 5 Oregon residents and they vote. The UHP’s official proposal comes out in mid-September 2026, then must be approved by the Legislature in 2027, and because it involves massive tax hikes, it must also be approved by voters in November of 2028. If approved by voters – and the Federal government – the soonest it could be implemented would be 2029 or more likely 2030. However the proponents of the UHP acknowledge they have no solutions to the Medicare issues. They will either need to severe the Medicare incorporation or the UHP will not pass. But they also say that without Medicare inside UHP, the UHP does not work. They seem to have set themselves up for failure.
Major insurers are dropping out of Oregon – as they will have no future in Oregon once the UHP arrives. Their departure will be used as part of the argument to enforce Oregon’s UHP on the state by 2028, raising taxes and delivering less value to 1 in 5 residents.
Oregon’s history of running health care is awful – the state’s Cover Oregon ACA/ObamaCare “Health Exchange” spent $450 million on development and marketing yet never enrolled even one individual before it was shut down. The same people now think they can run the state’s entire health care economy.
