Concerns Raised Over Medicaid Spending in Oregon

Oregon state Representative Dwayne Yunker raised eyebrows upon learning that tax dollars were being used to take developmentally disabled individuals to a strip club last summer.

Yunker, a Republican in a predominantly Democratic state, has highlighted this and other questionable Medicaid expenditures in Oregon that seem unrelated to health care.

He is set to meet lawmakers in Washington on Monday, along with officials from the Trump administration, to discuss the spending practices surrounding Medicaid in his state and potentially others. The Medicaid program, a collaboration between federal and state governments, aims to provide healthcare to low-income and disabled individuals.

In August, the Oregon Department of Human Services informed Yunker that disallowing the strip club visit could jeopardize federal Medicaid funding. They cited a federal law requiring state Medicaid programs to assist disabled individuals in community integration.

“The adult day program has taken developmentally disabled clients to strip clubs and bars,” Yunker stated. “They claim it’s community integration, but I mean, we’re not talking about visiting a park or a museum here.”

He voiced support for the Trump administration’s Medicaid reforms outlined in the One Big Beautiful Bill, particularly focusing on work requirements for receiving benefits.

In a letter dated August 18 to Dr. Mehmet Oz of the federal Centers for Medicare & Medicaid Services, Yunker noted that the strip club incident was just part of broader concerns regarding Oregon’s Medicaid program. He mentioned that $2.3 million in Medicaid funds were allocated in the previous year to a group that housed a Venezuelan gang member accused of serious crimes. Additionally, he pointed out that Medicaid reimbursements have covered “sex change” surgeries for minors.

Caprice Knapp, principal deputy director of the Centers for Medicaid & CHIP Services, informed Yunker in a letter from September 19 that the strip club issue appears to be settled. She emphasized that “nothing in this or any other Medicaid regulation permits taxpayer funding for activities like those you uncovered in Oregon.”

Knapp further noted that during a call in September with officials from the Oregon Health Authority and the Department of Human Services, it was confirmed that the activities in question were not part of any individual’s service plan, and Medicaid had not been billed for these outings.

“They have also acknowledged that the HCBS [Medicaid home- and community-based services] regulation was wrongly portrayed as necessitating these activities,” Knapp stated in her letter. “Based on this discussion, my staff is confident that this issue has been resolved.”

The Oregon Department of Human Services has not responded to inquiries regarding this situation.

Yunker expressed that these concerns are not confined to Oregon alone. “Oregon, California, and Washington are nearly identical, each competing to see how much of other people’s money they can spend,” he remarked. “What you’re seeing in New York City has been happening out west for a long time—they just don’t always label it socialism.”

This incident in Oregon “is not simply an isolated scandal,” asserted Tony Woodlief, senior executive vice president at the State Policy Network, which comprises conservative and libertarian think tanks. “Americans frequently misunderstand what federal law actually mandates,” he said. “State bureaucrats sometimes use Washington as a shield to push agendas past those elected by the people. Conversely, federal ideologues might issue unauthorized instructions that misinterpret laws to promote policies no one voted for. The end result? Unelected bureaucrats—not the public—end up taking control.”

Woodlief added that this issue extends beyond Medicaid and expressed gratitude for leaders like Yunker who confront these crucial questions and demand accountability.

Notably, Oregon announced two years ago that it would provide Medicaid benefits to illegal immigrants, stating that from July 1, 2023, individuals meeting certain income criteria would qualify for full OHP [Oregon Medicaid] benefits, irrespective of their immigration status.

The funding supporting these benefits for illegal immigrants originates from state Medicaid dollars, rather than federal funds. The state has also highlighted that Medicaid can be used for temporary rental assistance and nutrition support.

In August, Oregon Governor Tina Kotek, a Democrat, criticized Republican proposals for federal Medicaid reforms, claiming they would lead to more sickness and poverty among Americans and Oregonians. “I will collaborate with Oregon lawmakers and community partners to support our residents and navigate through this unnecessary, harsh challenge,” Kotek said.

In his correspondence with Oz, Yunker remarked, “The true hardship lies in what my constituents face under Oregon’s flawed Medicaid program.” He added, “We have barely begun addressing the issues within the Medicaid system.”