Gov. John Kitzhaber signs a bill Friday that he believes will usher in a historic “transformation” of health care in Oregon. The signing ceremony was at the World Trade Center in Portland.A behind-the-scenes fight over Medicaid changes helped deep-six efforts by the Oregon Legislature to whittle down increasingly costly retirement benefits for public employees, Gov. John Kitzhaber said Friday. It was the first time anyone offered a detailed explanation of why reform of the Public Employees Retirement System failed, even though it was supposed to be a top priority for lawmakers this session. The gist, according to Kitzhaber, is that the state’s biggest public employee union wanted a new class of home health care workers to be part of their collective bargaining unit. When that proposal withered under Republican opposition, Democrats locked down a bill that would have eased the state’s requirement to pay 6 percent of state worker wages into their retirement accounts. Kitzhaber gave a brief description of the partisan tussle in an interview Friday with The Oregonian’s editorial board. It not only helps explain the lack of movement on one of the state’s biggest cost-drivers, but also offers a rare insider view into how things work at the Capitol. “It’s pretty straightforward,” Kitzhaber said, shortly after a public ceremony to sign House Bill 3650, the so-called health care transformation bill. “The Democrats essentially would not run out the PERS bill, which was a tough vote for a lot of them, unless the Republicans put collective bargaining in the transformation bill. That’s where it got high-centered.”The governor began the legislative session hoping to get some flexibility in PERS benefits to help with negotiating new labor contracts with the Service Employees International Union and American Federation of State, County and Municipal Employees, which represent state workers. He particularly wanted the ability to bargain over a reduction in the 6 percent pickup because under current law the state must either pay the entire amount or nothing. At the same time, the governor was in deep talks with legislative leaders over a complex plan to change the way Medicaid recipients get health care under the Oregon Health Plan. Late in the session, which ended Thursday afternoon, the two issues became intertwined in the kind of horse-trading that often happens at the Legislature but is seldom seen by the public. As part of cost-saving changes, the Legislature worked on a bill that would create a new class of employee who would make home visits to chronically ill patients, pregnant women and other state Medicaid clients to help them avoid expensive hospitalizations or trips to the emergency room. officials pushed for language in the bill that would ensure that those workers were unionized. “You want to make this a job that people stick with,” said SEIU lobbyist Arthur Towers. “We’re worried it can become a dead-end, low-wage job with McDonalds-like turnover.” But beefing up union ranks, Kitzhaber said, “was a hang-up for Republicans, not surprisingly.” They refused. Democrats responded by not allowing the PERS bill to move forward. Rep. Tim Freeman, R-Roseburg, who helped craft the health care bill, said he heard about the attempted deal but wasn’t party to the negotiations. He said he objected to unionizing the home care workers because he didn’t want to tie the hands of health care organizations that offer Medicaid services by insisting they hire union workers. “The whole idea of transformation is to be innovative” and to save money, Freeman said. In fact, the state budget is balanced on the prospect that the new way of providing Medicaid will save the state $239 million over the next two years. Kitzhaber said he would have liked the trade-off to succeed. He believes the new corps of home care workers need good benefits and family wages that unions typically bring, and he would have liked the ability to bargain with state worker unions over the size of the 6 percent PERS pickup. “We need to address that,” he said about PERS. “The most rational way to address it is to create more flexibility at the bargaining table.”
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