Federal Medicaid cuts threaten to strip home and community-based services from thousands of disabled Oregonians, with the state facing $11 billion in lost federal revenue over five years and more than $1 billion at risk in the 2027-2029 biennium alone. The cuts target optional HCBS programs that keep disabled people in their homes rather than institutions.

The Oregon-specific impact is devastating in scope. Of the 1.4 million Oregonians on the Oregon Health Plan, up to 200,000 could lose or drop coverage. Another 462,000 OHP members would need to prove eligibility every six months and meet 80-hour monthly work requirements. The state's Healthier Oregon program — covering 90,000+ undocumented immigrants — faces elimination. Most critically, ODHS has proposed eliminating the parental income disregard, which would cut Medicaid from 2,300 disabled children, saving $36.8 million in state funds but losing $67.8 million in federal matching dollars. These medically complex children represent only 6% of Medicaid-enrolled children but account for roughly 40% of pediatric spending.

For healthcare providers, the implications cascade immediately. Home health agencies serving disabled populations face revenue cliffs. Hospitals will absorb higher emergency department utilization as home care recipients lose services and decompensate. CCOs must plan for the possibility that their highest-cost members — those requiring intensive care coordination — lose access to the community-based supports that prevent institutionalization. The federal provider tax ceiling reduction from 6% to 3.5% further constrains state funding options. Practice owners should assess their Medicaid patient panels and identify which services are funded through optional HCBS waiver programs.

Watch for Governor Kotek's Medicaid advisory group recommendations and the December 31, 2026 work requirement enforcement deadline.