Measure 101 has its roots back in the era of former Gov. John Kitzhaber, the emergency room doctor who wanted to remake the way Oregon handles health care.

Kitzhaber’s main legacy, beyond the scandal that ended his tenure as governor, is the expansion of health insurance for poor Oregonians in the form of the Oregon Health Plan, the state’s version of Medicaid.

He first talked up health care reform in the early 1990s and was still using it as a sign of his success on the stump as recently as four years ago: “So this is a huge success story, and we’re leading the nation here in redefining a changing our model of delivering heath care,” he told voters.

Oregon Gov. John Kitzhaber greets supporters at the Democratic election night party in Portland in 2014.

Oregon Gov. John Kitzhaber greets supporters at the Democratic election night party in Portland in 2014.

Greg Wahl-Stephens/AP

Both Democrats and most Republicans supported Kitzhaber’s ideas. So when President Obama proposed expanding Medicaid under the Affordable Care Act, Oregon lawmakers embraced it. Today, 95 percent of Oregonians have some form of insurance, among the highest rates in the nation.

But that level of coverage is expensive, especially now that the federal government is reducing Medicaid contributions.

To pay for the growth in Medicaid coverage, lawmakers, hospital owners, health insurance CEOs and just about everybody involved in the business of health care teamed up during last year’s legislative session and put together a revenue package known as House Bill 2391.

Though supporters prefer to call it assessment, legislators essentially passed a tax on hospitals and health insurance companies.

And those hospitals and insurance companies all agreed to it.

“We are supportive of this because it was part of the commitment we made at the end of session to fund Medicaid,” said Andy Van Pelt, the executive director of the Oregon Association of Hospitals and Health Systems. “The alternative of lack of coverage — we’re talking kids, seniors, people with disabilities — is unacceptable.”

Van Pelt’s group estimates it would be cheaper to treat people with health insurance under Measure 101 than to treat them without insurance when they turn up sick in emergency rooms, which are required to provide care. 

The vast majority of Oregon’s health organizations agree on this. At last count the “Yes On Measure 101” campaign had 160 endorsements — including unions, churches, schools, firefighters, housing advocates and climate activists.

“There’s a real possibility that people could lose their coverage,” Van Pelt said. “It would just destabilize the Medicaid program for hundreds of thousands of people and that would be utter chaos.”

But a small group of Republican lawmakers opposed the tax, including Rep. Cedric Hayden. He’s a dentist from Fall Creek who accepts Medicaid patients and runs a charitable health clinic in Lane County.

“If we were anti-Medicaid funding people, you could easily argue that we would refer the whole bill. We did not,” he said.

Instead, the “Stop Healthcare Taxes Committee“ collected enough signatures to attempt to block the part of the bill that pays for much of the Medicaid expansion. Measure 101 would get rid of a 0.7 percent increase to an existing tax on hospitals and stop a 1.5 percent tax on health insurance contracts.

If kept in place, those taxes would likely be passed onto consumers. But Measure 101 would also fund a program that could save health care consumers $300 a year. 

West Linn Rep. Julie Parrish is a chief petitioner of Measure 101. She grew up on Medicaid and thinks it could have saved her sister’s life. Parrish says she’s a Medicaid supporter, but thinks the tax is unfair because it doesn’t apply to big corporations and unions.

“They passed the tax to the people without a lobbyist, right?” she said. “Small businesses, mom-and-pop businesses, individuals who have to buy their own (insurance).”

Parrish and Hayden said they also worry that money from the new tax can be spent on anything, not just health care.

“Those taxes don’t have to go back to Medicaid,” Parrish said. “So essentially it’s a backdoor way to fund other general fund priorities.”

Parrish said she simply doesn’t trust the Oregon Health Authority, saying it wasted millions on things like Medicaid overpayments and Cover Oregon.

She thinks Medicaid would be better funded with something like a cigarette tax increase, although it’s not clear that would generate enough money or garner enough votes to pass. 

People with the Yes On Measure 101 campaign say 48 states use these kinds of assessments to pay for health care for poor people. And they point to a legal memo  saying the tax money couldn’t be put in the general fund.

“Measure 101 is the most fair way to fund our health care system,” said Felisa Hagins, political director for Service Employees International Union Local 49, which supports Measure 101. 

Hagins said the state can’t simply levy a tax on large corporations like Nike or Intel, because they self-insure and numerous legal decisions have blocked such efforts.

So voters now have a choice. Do they try the new Medicaid funding system? Or do they see if lawmakers can find a better solution during their six-week session in February than they could over last year’s six-month legislative session?