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The U.S. Health and Human Services Department last week approved Oregon's controversial plan to "ration'' health care for Medicaid recipients.

Last fall, under the Bush Administration, the department refused to grant the federal waivers necessary to implement the plan on the grounds that it violated the Americans With Disabilities Act. (See Education Week, Sept. 9, 1992).

The hotly debated proposal calls for expanding basic health-care coverage while eliminating compensation for medical services deemed less effective or necessary.

At the core of the plan is a list of 688 medical treatments ranked according to their effectiveness by a state commission. Medicaid coverage would be provided for only as many treatments as the legislature voted to fund in the budget.

Critics of the plan have charged that it would deny necessary medical services to significant numbers of poor children and those with disabilities.

Seventy-one national disability and other advocacy groups had earlier sent a letter to President Clinton stating their opposition.

At a March 19 press conference announcing the decision, Secretary of Health and Human Services Donna E. Shalala noted that the state had "significantly modified'' its initial proposal, and said the new version "insures that all Oregonians below the poverty line will receive essential health-care services, and that no one now covered will lose coverage.''

Supporters of the Oregon initiative say it could serve as a national model for health-care reform. The plan also features a "pay or play'' mandate that requires employers to provide health insurance for employees or pay into a state insurance pool.

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