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To contact me, please click here: Rep.EdDiehl@oregonlegislature.gov
Friends,
Oregon has spent decades chasing a vision of universal health coverage — the belief that if every person has a government health plan, we will have solved the health care problem. On paper, that sounds compassionate. In reality, it’s become a costly illusion — one that consumes billions of dollars without delivering the access people were promised.
Nearly everyone in Oregon now technically has “coverage.” Yet more and more Oregonians — especially those on Medicaid — can’t find a doctor, can’t get an appointment, and often travel hours for care. The card in their wallet doesn’t guarantee access; it guarantees a waiting list.
Coverage does not mean access, and it’s time we face it honestly.
When Coverage Replaces Access
The fundamental mistake Oregon has made is confusing coverage with care. They are two very different things.
Health care access depends on capacity — the number of doctors, nurses, clinics, hospitals, and the reimbursement levels that keep them operating. Coverage, by contrast, is a paper promise — an insurance plan that claims to pay for something, even when the system can’t deliver it.
Over the last decade, Oregon’s policy approach has focused almost exclusively on expanding coverage. We’ve taken limited Medicaid dollars and spread them across a larger and growing population. At the same time, we’ve capped reimbursement growth — paying providers far below the true cost of care — while layering on mandates for broader benefits, higher quality metrics, strict labor standards, and complex reporting requirements. Expanding coverage is politically easy — it looks good in headlines and budget notes — but expanding capacity requires hard work, discipline, and the courage to confront the real cost drivers.
The math simply doesn’t work. When the state demands T-bone steak quality but pays hamburger prices, eventually the steakhouse closes.
Providers leave the Medicaid market because it underpays. Private insurers are forced to absorb the cost gap, driving premiums higher for working families. And the very people Medicaid was designed to serve — the elderly, children, and individuals with disabilities — are left competing for fewer and fewer underpaid providers.
It’s not a mystery. It’s Economics 101.
Oregon’s “Cost Growth Target” is a perfect example of how good intentions get lost in bureaucratic translation. The name suggests we’re controlling the cost of care, but that’s a misnomer. The state isn’t lowering the real cost of delivering health care — labor, supplies, utilities, construction, and regulatory compliance all continue to rise every year. In fact, the Legislature has passed bill after bill that increases those underlying costs — from new staffing mandates and wage requirements to building standards and compliance rules. Meanwhile, the Cost Growth Target focuses only on controlling reimbursement rates, not the real cost drivers. In practice, it tells providers, “You must deliver care at below-cost rates,” and calls that savings. But when government limits what it pays while simultaneously driving up costs, it doesn’t reduce spending — it just shifts the shortfall onto providers, private insurers, and patients. The result is predictable: fewer providers, higher private premiums, and declining access for those who rely on public coverage. It’s another case of policy labels concealing economic reality.
Friedman’s Warning — and Oregon’s Proof
Nobel Prize-winning economist Milton Friedman often said that when government tries to guarantee outcomes by fixing prices, it ends up guaranteeing shortages instead. You can’t repeal the laws of supply and demand by legislation.
That’s exactly what Oregon’s health care system demonstrates.
By fixing Medicaid reimbursement below the true cost of care, we have created a price ceiling that drives providers out. By expanding coverage to new populations, we have driven demand up. The predictable result: a shortage of access.
Friedman called this the “third-party payer problem” — when someone other than the consumer pays the bill, no one has an incentive to spend wisely. Patients overutilize because they don’t feel the cost. Bureaucrats ration care because they can’t afford the promises. Providers drown in regulation while trying to make ends meet and leave the market.
Oregon has managed to create all three conditions at once.
This crisis didn’t appear overnight, and it didn’t come from any single bill or budget cycle. Oregon has been building this problem for years through a series of well-intentioned but unsustainable policy choices — expanding eligibility, capping reimbursements via an overall cost growth target, and layering mandates faster than the system can absorb them. Every insurer, provider, and patient in the state knows it. The math has been upside down for a long time. What we’re seeing now is the inevitable result of policies that prioritize coverage numbers over care capacity. It has nothing to do with the “Big Beautiful Bill” or HR 1 — it’s the product of years of state-level decisions that ignored the basic economics of health care delivery. These choices haven’t just strained budgets — they’ve redefined what Medicaid is, and who it serves.
Expanding Coverage, Diluting Care
Oregon’s health care crisis is not confined to a single program — it’s the product of a long series of expansions that have stretched limited Medicaid dollars across an ever-larger population. Today, roughly one in three Oregonians is covered by Medicaid or a Medicaid-like plan. That’s one of the highest rates in the nation — placing Oregon among just a handful of states where nearly a third of all residents now rely on government-funded health coverage. That includes not just the elderly, children, and people with disabilities — the populations the program was originally designed to protect — but now hundreds of thousands of working-age, able-bodied adults who could otherwise participate in the private market.
Two programs in particular have contributed to this shift. Oregon is one of just three states to implement the Bridge Plan (also known as the Basic Health Plan, established under the ACA), which expands Medicaid coverage to people between 138% and 200% of the federal poverty level. Oregon has also implemented the Healthier Oregon Program (HOP), which extends full benefits to non-U.S. citizens (paid entirely by state tax revenue). Each expansion may have a compassionate intent, but together they’ve transformed Medicaid from a safety-net program into a catch-all entitlement — without adding any new capacity or addressing the rising costs of providing care.
Every new enrollee draws from the same limited funding pool that supports Oregon’s most vulnerable citizens. The result is predictable: reimbursement rates stagnate, providers leave the system or consolidate and reduce competition, and access for those truly dependent on public care continues to shrink. Even supporters of these programs can see the economics are unsustainable. We are subsidizing new populations while underpaying the providers who care for our most fragile Oregonians. That is fiscal negligence disguised as virtue.
HOP and the Bridge Plan are not anomalies; they are symptoms of a system that confuses expanding coverage with delivering care. Oregon’s challenge is not a lack of generosity — it’s a lack of discipline and prioritization. Until we confront that reality, every expansion will deepen the unequal access to care — the very problem it claims to solve.
The Path Forward: Universal Access Through Market Innovation
If we want universal access as opposed to universal coverage, we must rebuild Oregon’s system from the ground up. That means:
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Refocusing Medicaid and state-funded health programs on the most vulnerable Oregonians — the elderly, children, and those unable to care for themselves.
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Paying fair, sustainable reimbursement rates to retain providers and restore capacity.
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Encouraging innovation — direct-pay clinics, subscription care models, tiered pricing, telehealth, and nonprofit partnerships that expand reach and affordability without bureaucratic waste.
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Removing cost-drivers buried in Oregon law — labor mandates, facility rules, reporting requirements, financial penalties, and a barrage of bureaucratic rules that inflate the cost of care delivery. We must align state policy with actual cost realities.
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Redirecting funds from unsustainable expansions like the Bridge Plan and HOP into core services that ensure genuine access.
Markets, when allowed to function, amplify compassion. They allow choice, reward efficiency, and create space for new ideas. They create more affordable options for more people. When government focuses on outcomes instead of control, Oregonians get better care - at a lower cost, with greater dignity.
Oregon’s Crossroads
Oregon stands at a turning point. We can keep chasing the illusion of universal coverage — adding more names to a government ledger while access collapses — or we can build a system rooted in universal access, where every Oregonian, regardless of income, can actually see a doctor when they need one.
Universal coverage is a promise printed on paper. Universal access is a promise delivered in person.
The difference is not ideological. It’s practical. It’s moral. And it’s urgent.
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Thank you for staying engaged as we work to protect the rights and livelihoods of Oregonians. I will continue fighting for the issues that matter most to House District 17 and keeping you informed every step of the way. Stay tuned for more updates.
In Liberty,
Representative Ed Diehl
House District 17
Capitol Phone: 503-986-1417
Capitol Address: 900 Court St. NE, H-378, Salem, Oregon 97301
Email: Rep.EdDiehl@oregonlegislature.gov
Website: https://www.oregonlegislature.gov/diehl
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