Kate Brown is sworn in as governor

Gov. Kate Brown, shown here at her Jan. 9, swearing in, hailed the news that the federal government had agreed to extend Oregon's Medicaid waiver for another five years. Beth Nakamura/Staff

(Beth Nakamura)

In the final week of the Obama administration, the federal government gave the state permission for what officials claim will be five more years of stability in how health care is delivered to Oregon's poor.

Gov. Kate Brown on Friday hailed the news as a significant victory for the state's most vulnerable citizens. But the waiver renewal does not change the fact the state program is plagued by budget uncertainty.

The Oregon Health Authority must come up with a new $350 million to pay for the program over the next two years. The federal government's contribution to Oregon's Medicaid operation is decreasing from 78 percent to 75 percent of the total. That is just one of the factors contributing to a $935 million budget gap at the Oregon Health Authority, state officials said.

To make matters worse, Oregon did not get $1.25 billion in federal money it had asked for to add to the state's coordinated care organizations, the new regional operations the state created in 2012 to offer prevention-focused healthcare to the poor.

Still, the news from the federal government was welcome. The Centers for Medicare and Medicaid notified the state on Thursday that it had agreed to extend until June 2022 the waiver that allows Oregon to use its custom approach to providing care. Sixteen of the coordinating organizations now serve more than a million Oregonians.

Brown said the waiver extension is crucial to continuing what has been a successful drive to improve health care services while reducing costs. "I will not rest," Brown added, "until all Oregonians have access to quality health care."

But even with the waiver extension, there are plenty of questions. The health care landscape is almost surely to change drastically after President-elect Donald Trump takes office next week. He and the Republican-controlled Congress are already taking steps to repeal Obama's signature Affordable Care Act.

Jeremy Vandehey, Brown's health policy adviser, said Friday that the Medicaid waiver is not subject to the Affordable Care Act. The state has entered into a legal contract with the Centers for Medicare and Medicaid that will not easily be undone, he said.

The waiver extension was granted just seven days before the departure of President Barack Obama, champion of the Affordable Care Act. The transition to a Trump administration could lead to profound changes in how this country dispenses healthcare.

Ron Wyden, Oregon's senior senator, said he worked behind the scenes to "make sure Oregon's waiver renewal happened before the end of the Obama administration."

And at least one powerful Republican congressman seemed to speak favorably about the waiver, though he fell short of explicitly endorsing it. A spokesman for Rep. Greg Walden, R-Ore., said Friday that Walden "is looking forward to moving reforms to the program that ensure the most vulnerable are protected, that give states more flexibility to ensure the program works best for the residents, and that puts Medicaid on a stronger financial footing to make sure it is sustainable."

With the House now controlled by Republicans, Walden chairs the House Committee on Energy and Commerce, an influential position for any healthcare legislation. On Friday, the committee passed a budget resolution, an initial step in the effort to repeal the Affordable Care Act.

"Put simply, Obamacare is a mess," Walden said.

One in four Oregonians -- more than a million in all -- are poor enough to qualify for Medicaid. The cost of that care now exceeds $14.5 billion in a two-year budget.

The state claims the coordinated care model has saved $1.4 billion in healthcare costs since 2012. Hospital readmissions have been cut by a third. Preventive care like prenatal, substance abuse treatment and developmental screening have all increased, the state claims.

Jeff Heatherington, CEO of FamilyCare, one of the coordinated care organizations that serves Multnomah County, said the new model "has been wildly successful."

There have been a few hiccups. FamilyCare got into a protracted legal dispute with the Oregon Health Authority over the rates it could charge. Last year, the parent company of Trillium Health Plan, the care organization serving Lane County, raised eyebrows when it sold Trillium to an insurance company for more than $100 million.

Heatherington said those issues shouldn't take away from the coordinated care organizations' record of success, a record he hopes the new administration and Congress will take note of.

"Of course, one never knows what's going to happen in the Trump administration," he said.

-- Jeff Manning

503-294-7606, jmanning@oregonian.com