The new revenue from the proposed tobacco tax increases is to be used to provide health insurance to low-income children and to expand health insurance coverage for low-income adults; however, the precise allocation of funds has not been determined. According to the distribution plan currently included in the bill, less than 44% of the revenue from the proposed tobacco tax increase would go to the “Healthy Kids” program.

 During discussions in the Health committee, Republican members offered amendments to the bill, such as a prohibition on providing coverage to immigrant children who are in Oregon illegally and the elimination of coverage for families with incomes more than 250 percent higher than the federal poverty level. Both Republican proposals were rejected and the bill was referred to the House Revenue Committee without any changes.

Once the House Revenue Committee has received public testimony and debated the pros and cons of using the tobacco tax increases as the funding mechanism, the bill will be referred to the Joint Committee on Ways & Means. The Ways & Means Committee will also take testimony on the bill before sending it to the House floor for a full vote. Since the bill is a tax raising measure, it requires a 3/5-majority approval. With Democrats holding a lead of 31 to 29 over the Republicans, passage will require at least five Republicans to vote with all 31 of the Democrats.

Governor Kulongoski has marked the Healthy Kids Program as one of his top priorities for the session, making this a difficult issue to oppose. There will be a great deal of pressure on Democrats and Republicans to approve the measure. ONSA needs the help of retailers, employees and interested citizens to stress the flaws in the bill. ONSA is not opposed to providing healthcare to uninsured Oregonians. However, if the program is to be funded, a more equitable and reliable funding mechanism is needed.