Oregon's Medicaid program survived intact Tuesday, after voters approved hundreds of millions of dollars in health care taxes in a special election.

Measure 101, which led 62 percent to 38 percent with returns partially tallied, was the only issue on the ballot. It will raise $210 million to $320 million in taxes on Oregon's largest hospitals and many health insurance policies by 2019.

Voters' wide approval of the tax deal was a victory for Democrats, who put the deal together and brokered enough votes in the Legislature to pass it, and for the health care industry, which bankrolled the "yes" campaign and will benefit from the resulting $1 billion-plus that will be spent on Oregonians' health care.

The passage of Measure 101 also will free lawmakers to spend their upcoming six-week session considering major policy changes, such as whether to adopt a statewide carbon cap and pricing scheme, instead of seeking a workable patch to the Medicaid system.

Large hospitals will pay a 0.7 percent tax. Insurance companies will pay a 1.5 percent tax on most policies, which they are allowed to pass along to consumers.

That tax revenue will enable Oregon to qualify for $630 million to $960 million in federal Medicaid matching funds that benefit the state's health care industry. Oregon will also use approximately $31 million of the insurance taxes to fund the state's reinsurance program, which is supposed to rein in the cost of health insurance by reimbursing companies for particularly expensive claims.

Nineteen mainly rural counties were voting against the measure in preliminary returns, and the largest was Linn County.

Results in Multnomah County were far more one-sided than those anywhere else in the state, with 80 percent of voters saying "yes" and just 20 percent "no."

Lawmakers passed the taxes as part of a larger Medicaid funding plan last year. But three Republican lawmakers in the Oregon House objected to some of the taxes and they referred part of the plan to voters.

Once lawmakers sensed the question could go to voters, they passed special one-time election rule changes so that the question would be decided before next month's session -- in case they would need to spend that time finding a fix.

Voters' approval of the tax plan likely brought sighs of relief for its Democratic architects in the Legislature and Gov. Kate Brown. The governor's staff played a central role in negotiating the deal and walked away with enough money to achieve one of the governor's policy goals last year: extending Medicaid coverage to 13,000 to 15,000 low-income children without proof of U.S. citizenship, including immigrants in the country illegally.

Democrats in the Oregon House helped achieve the deal by agreeing to fund three projects in a Medford Republican's district, in exchange for that lawmaker providing the lone Republican "yes" vote in the state House.

For supporters of Measure 101, the most important takeaway from the election results was that low-income adults and children can rest assured they will not lose health coverage or face reduced benefits through 2019.

"Voters have spoken and lawmakers now have a clear mandate, Oregonians believe everyone deserves access to affordable healthcare," said Patty Wentz, a spokeswoman for the "yes" campaign. "The other big message from this campaign is health care should not be a political pawn, and Oregonians are going to band together against anyone who tries to take it away."

Rep. Julie Parrish, a Republican from West Linn, spearheaded the effort to overturn the taxes.

"When we took this to the ballot six months ago, we said we wanted to let voters vote," Parrish said Tuesday night. "We wanted to have a conversation about health care."

Parrish said the campaign achieved those goals.

The "no" campaign raised relatively little money – just $126,000 as of late last week, compared with $3.6 million in contributions reported by the "yes" campaign. The "no" campaign's biggest financial supporter was another Republican lawmaker who worked on the referendum, Rep. Cedric Hayden of Roseburg.

The largest contributor to the campaign to pass the taxes was the association that represents Oregon hospitals. Other health care companies also spent heavily to pass the measure. They argued it would be better for patients to receive continuous coverage and treatment than wind up in the emergency room with serious health problems.

Supporters also pointed out the state taxes would allow the state to keep federal matching funds that support jobs in the health care industry.

Parrish and Hayden had argued it was unfair to tax health insurance and there were better ways to raise revenue for Medicaid, such as tobacco taxes. They crafted a bill for the upcoming legislature session that included some of those ideas.

The passage of Measure 101 doesn't resolve Oregon's long-term dilemma of how to pay the costs to insure additional patients who qualified for Medicaid under the broadened eligibility criteria allowed under the Affordable Care Act.

In Oregon, the general income limit went from 100 percent of the federal poverty line to 138 percent. The federal government initially paid the entire cost to add these Medicaid patients. But states must gradually pay more of the cost, and Oregon has not decided how to do that in the future.

-- Hillary Borrud

503-294-4034; @hborrud