Part of the Oregon Basic Health Services Program, initially developed in 1987 and passed by the Oregon legislature in 1989, otherwise known as "The Oregon Plan," which attempted to expand the number of people served by the Medicaid health plan in Oregon (raising Oregon’s Medicaid eligibility up to 100% of the Federal Poverty Standard). In an attempt to provide greater access to at least some services (moving closer to the goal of universal access), the planners prioritized those services for which the state would pay under Oregon’s Medicaid program. The planners reasoned that by limiting the number of services normally covered under Medicaid, they would be able to extend access for many individuals who previously had no access to any services under the old Medicaid plan. Thus, instead of rationing medical care by excluding certain members of the population from having any access, Oregon attempted to ration care according to a priority list of services to which more individuals who could not afford private insurance could have access. The list contained approximately 300 line item services that would be covered under the plan and was developed through a communal process of public discourse (i.e., "town meetings"). Because the priority list limited the number of services normally mandated for inclusion in state Medicaid programs, Oregon had to apply to the Federal Healthcare Financing Administration (HCFA) for a special Medicaid Waiver. After much public and legal debate, the Waiver was applied for in 1991 and went into effect in 1992.
Any items on the list that fell below the 300 priority items covered under the new Medicaid plan could be received only as long as the patient was able and willing to pay for it out of pocket, which is one reason the Oregon Plan is quite controversial. The Oregon Plan also has been criticized for only including the worst-off populations in its rationing plan. The overall effect, then, is that the aggregate health status of all the poor is increased, but only by making those who already received Medicaid worse off than they were before, rather than other social groups that are better off bearing the burden of sacrifice. [Sources: Thorne, JI, "The Oregon Plan Approach to Comprehensive and Rational Healthcare," in Rationing America’s Medical Care: The Oregon Plan and Beyond, eds. Strosberg, MA, Wiener, JM, Baker, R, et al. (Washington, D.C.: The Brookings Institution, 1992), 24-36. Daniels, N, "Justice and Healthcare Rationing: Lessons from Oregon," in Rationing America’s Medical Care: The Oregon Plan and Beyond, eds. Strosberg, MA, Wiener, JM, Baker, R, et al. (Washington, D.C.: The Brookings Institution, 1992), 185-94.]