Oregon Medicaid Expert Warns of Threats to Innovation as Federal Cuts Are Expected

As lawmakers consider changes to the Medicaid budget, Oregon’s Medicaid system is bracing for any potential impact.

Eric C. Hunter, president and CEO of CareOregon, spoke with Managed Healthcare Executive about the state’s innovative programs and the risks posed by uncertain federal funding.

This conversation took place prior to the release of the House GOP’s Medicaid plan, which proposes work requirements, stricter eligibility checks and limits on provider taxes—but does not mention cutting federal match rates or imposing per capita funding caps.

Medicaid depends heavily on federal dollars—while some states have flexibility through waivers, federal funding and match rates remain the foundation of the system, Hunter stressed.

“There’s no doubt that we are closely watching what happens with the federal budget,” he said. “We're closely watching what's happening in DC, but it's hard to tell where things are going to land, because we're hearing every different story and every different set of wishes from the people in charge.”

While many Republican leaders have claimed they don’t intend to touch Medicaid, Hunter said proposed budget reconciliation plans may still require significant cuts—potentially reducing Medicaid spending by hundreds of billions over the next decade.

These cuts would force difficult decisions at the state level.

“When you talk about billions and billions of dollars, something has to give,” Hunter noted, adding that the ability to find those funds elsewhere in the budget is limited.

Many of the proposed reductions are framed as efforts to reduce “waste, fraud, and abuse,” but Hunter said that definitions of waste vary widely.

“We believe that people getting the care they need is critical to the success of the program, and others see basic services as abuse or unnecessary. So they call them waste,” he added.

Hunter also shared his concern that programs addressing social determinants of health (SDoH)—such as housing, nutrition and climate-related health protections—could be among the first to face cuts.

These areas are sometimes seen as nonessential because they don’t involve direct doctor-patient care.

However, Hunter argued they are typically more cost-effective and impactful in the long run.

“I do think that those are easier targets, because at their face, they don’t have the direct correlation of patient and provider, right?" he asked. "That many people think is the entirety of healthcare, and that’s not right.”

For example, Oregon recently added a benefit to provide air conditioners to vulnerable residents during extreme heat and wildfire smoke events.

Without them, folks with respiratory conditions may end up hospitalized at a much greater cost.

In Oregon, the state government has prioritized community health and creative approaches to care for years, a goal that dates back to the leadership of former Gov. John Kitzhaber and continues under Gov. Tina Kotek.

Hunter described Oregon as a state that “believes in building communities and in having healthy people,” one that has invested in upstream initiatives using both state and federal funds.

Although there are challenges expected, Hunter remains hopeful.

He praised organizations such as CareOregon for using financial reserves strategically to boost state and federal dollars, especially in under-resourced communities.

However, he warned that federal cuts targeting social services or equity-based programs could do lasting damage.

“If we can’t address those issues directly, then we really aren’t serving people as they need to be served,” Hunter said.

The Congressional Budget Office projects the GOP plan is to reduce federal Medicaid spending by $715 billion and leave 8.6 million more people uninsured.