Health Care

Does Oregon Prove Viability of Public Option in Health Care?

| by Reason Foundation

By Nick Gillespie

Yes, says former Oregon Gov. John Kitzhaber, who is running for office again and is touting his state's low-income public plan as a way of increasing the percentage of insured residents and curbing costs. Unlike many similar plans, the Oregon plan doesn't hide the fact that it rations care; indeed, the plan has a list of what it will and will not cover. From a SoCal public radio writeup on the situation:

John Kitzhaber began his work life as an emergency room doctor in 1974. He was elected governor of Oregon 20 years later — and health care has been a large part of his political life. He is considered the father of the Oregon Health Plan, which expanded health care to the working poor by spreading Medicaid dollars over a larger group of people and rationing services.

Now Kitzhaber is running for governor once more — and health care is on his agenda again. He wants to make Oregon a health care model for the rest of the country.

The bad news? According to the Cascade Policy Institute, in the late 1980s, the percentage of uninsured Oregonians was 18 percent. Now it's 17.4 percent. As for containing costs, Oregon had to shut down enrollment in its program for several years due to unexpectedly high demand. Similarly weak, unintended, or disastrous experiences are common are in other states that have expanded the state's role in providing health care. And the states are generally more responsible than the feds. As Eric Fruits writes:

States can limit their losses because they must balance their budgets. Moreover, states cannot print money. The federal government does not have a balanced budget requirement, and it has the power to print money. That means that the costs of federal efforts to expand health care ultimately will result in a combination of higher deficits, more taxes and inflation. When Congress returns from its break, it either will learn from the costly mistakes of the states, or it will repeat them on a national scale.