EDITOR’S NOTE: Here’s an installment from Tillamook County’s State Representative Cyrus Javadi’s Substack blog, “A Point of Personal Privilege.” Oregon legislator and local dentist. Representing District 32, a focus on practical policies and community well-being. This space offers insights on state issues, reflections on leadership, and stories from the Oregon coast, fostering thoughtful dialogue. Posted on Substack, 10/6/25
The federal government shutdown, and why it’s really about Medicaid, SNAP, and the people who actually need them.
By State Representative Cyrus Javadi
If politics had a Frequently Asked Questions page, somewhere near the top would be: “Why are we spending billions of taxpayer dollars on healthcare for illegal immigrants?”
It’s the kind of question that answers itself. It sounds serious. Urgent. Practically self-evident.
There’s just one problem.
It’s not true.
But like all good myths, this one survives because it feels true. After all, people are hurting. Hospitals are closing. Budgets are bleeding. Somebody must be getting away with something.
It would be almost comforting if the root of our healthcare crisis were as simple as a caravan of freeloaders with cleverly forged Medicaid cards.
Unfortunately, the truth is worse.
What’s actually happening is that Congress, in its infinite wisdom, passed a law that slashes federal funding for Medicaid and SNAP, jacks up health insurance premiums for working families, burdens states with impossible new rules, and pretends the resulting chaos is a lesson in fiscal responsibility. And they’re calling it reform.
The Imaginary Crisis
Let’s get the headline myth out of the way.
Oregon’s Healthier Oregon program does provide healthcare coverage to people regardless of immigration status. But here’s the deal: it’s paid for entirely by the state.
Every. Single. Dime.
The federal government doesn’t chip in. It can’t. Federal law prohibits it.
This is not a gray area. The feds don’t reimburse for undocumented immigrants except in narrowly defined emergency cases, and even then, they reimburse at levels that make payday loans look generous.
When a Healthier Oregon enrollee racks up a hospital bill, the state pays 100 percent. So if your complaint is that “we” are spending billions on people here illegally, you’ll need to take it up with Salem, not Washington. Better yet, check the math. It’s not billions.
That’s usually the moment someone offers up a story that sounds suspiciously well-rehearsed. Something about how they were behind a “Mexican” at Fred Meyer, watching them pay for a cart full of groceries with a SNAP card, all while laughing about how easy it is to scam the system. The punchline always comes in the parking lot, where the alleged freeloader drives off in an $80,000 Escalade, presumably still laughing.
It’s the kind of story that survives not because it’s true, but because it scratches a particular cultural itch.
Meanwhile, the real story, one that lacks the convenient villains and talk-radio clarity, is that Congress passed H.R. 1 (aka the One Big Beautiful Bill).
On paper, it’s a budget reconciliation bill. In practice, it’s a bomb lobbed into the foundation of healthcare in states like Oregon.
The Real Cuts
Under H.R. 1, Oregon stands to lose over $15 billion in federal funds over the next six years.
Not for failing to cut waste or for running inefficient programs, but simply because Washington has decided to stop paying its share. More than 95 percent of those losses come from the Oregon Health Plan (Oregon’s Medicaid plan) and SNAP. That’s not a rounding error.
That’s the business model of the modern federal government: promise the world, cut the check in half, and act surprised when the plumbing explodes.
The new law requires Medicaid recipients in the expansion population, roughly adults without young dependent children, to work or volunteer 80 hours a month.
At first glance, that sounds like common sense.
But in the real world, this translates into massive bureaucratic hurdles, frequent redeterminations, and a steep drop in coverage among people who were already on the edge.
If you’re picturing people gaming the system while lounging in hammocks, update your mental image.
Instead, think of rural caregivers, part-time workers, and people with chronic conditions who don’t fit neatly into checkbox definitions of “medically frail.”
Think of the single mother in Warrenton who’s already juggling two jobs and trying to find a third that counts toward her monthly work requirement. Or, think of the farmer whose income only comes during harvest time in the fall.
Then imagine the state hiring an army of IT contractors to track her hours. That’s the plan. Does that sound like cutting red tape and shrinking the size of government?
The Oregon Health Authority estimates the new rules will strip over $2 billion in federal Medicaid funds in the next biennium.
That’s not some abstract accounting trick.
That’s providers not getting paid, hospitals running deficits, and patients losing coverage mid-treatment because a piece of mail got returned unopened.
The Premium Explosion Nobody Ordered
Depressed yet? Wait, there’s more. Because the enhanced premium tax credits that made health insurance semi-affordable for middle-class families?
Those are going away too.
Let’s take one example. A 60-year-old couple in The Dalles earning just under $100,000 currently pays about $674 a month for insurance on the exchange. But, starting in January, their premiums will jump to $2,794 a month.
Same plan. Same benefits. Just $25,000 more per year.
And if you’re tempted to think, “Well, they can afford it,” ask yourself what happens when tens of thousands of people in that income bracket drop their insurance entirely because they can’t actually afford it.
The answer? Hospitals will eat the cost when those people get sick or injured. And then those hospitals will try to make it back by increasing fees for the few remaining insured patients.
You don’t need to be a genius to see where this spiral leads. Hint: it’s not to financial prosperity.
When the Closest NICU Is Four Hours Away
Of course, none of this happens in a vacuum. Rural hospitals in Oregon were already bleeding red ink before Congress picked up the scalpel.
Providence Seaside closed its maternity unit. Bay Area Hospital in Coos Bay, a 150-bed facility serving tens of thousands, is on track to run out of money within three years. Oregon hospitals lost $300 million in the first quarter of 2025 alone.
Medicaid reimburses hospitals at about 60 to 80 percent of the actual cost of care.
That means they lose money treating almost every Medicaid patient.
Hospitals make up the difference by charging more to private insurers, but even that trick has limits. Eventually, the math breaks. Services get cut. Staff leave. And the people left behind learn that the nearest place to deliver a baby is three counties away.
This is not an argument for unlimited spending. It’s an argument for honesty.
If we believe rural healthcare matters, we should fund it. If we don’t, we should stop pretending we do. Right now, we’re doing neither.
The SNAPback Effect
And then there’s SNAP. You remember SNAP? The program that helps low-income families buy groceries. Under H.R. 1, Oregon will be responsible for up to 15 percent of SNAP benefit costs if its error rate exceeds 10 percent.
Historically, the federal government covered 100 percent of SNAP benefits. That’s not charity. It’s a recognition that hunger is a national issue, not a local inconvenience. But now, thanks to our latest exercise in virtue signaling, states with overburdened systems will be punished for being overburdened.
Oregon’s payment error rate is currently around 14 percent. So congratulations. The state is now liable for a multi-million-dollar tab (more than $450 million) because someone moved, missed a letter in the mail, or didn’t know which piece of paper proved they were poor enough.
All of this, plus the Medicaid changes, adds up to roughly $15 billion in lost federal funding in Oregon over the next six years. That’s $15 billion not spent at grocery stores, not circulated through rural economies, not funding emergency rooms or addiction treatment or maternal health programs.
But don’t worry, tips are now tax free.
The Politics of Pretend
Supporters of H.R. 1 (aka Republicans) will tell you these changes are about personal responsibility.
The phrase gets a lot of mileage in Washington. So does “fiscal discipline.” But strip away the buzzwords, and what’s actually happening is that Congress shifted massive costs to the states and called it reform. The federal government gets to pat itself on the back for cutting spending while local agencies figure out how to keep people alive with fewer tools.
It’s not reform.
It’s not reducing fraud or waste.
It’s not helping anyone.
And that’s the tragedy.
If this were simply about bad policy, it would be frustrating. But it’s worse. It’s dishonest. It gives people the false sense that we’re solving a problem, when in reality we’re just defunding it and walking away.
So the next time someone tells you Medicaid is bloated or that SNAP is being abused by freeloaders, pause before you nod. Ask who’s really paying. Ask who really benefits. And ask whether the people writing the checks have any idea what things cost in places like Coos Bay or Madras or Ontario.
The Myth We Chose Instead
So let’s go back to that FAQ.
No, we’re not spending billions on healthcare for undocumented immigrants.
What we are doing, right now, in real time, is letting a myth distract us from a much bigger truth.
Congress rewrote the rules. They pulled federal support out from under states, hospitals, and families, then slapped a sticker on the wreckage that says “fiscal discipline.”
But the discipline isn’t theirs. It’s ours.
It’s paid by the family who just got a letter saying their Medicaid coverage ended. By the nurse in a rural ER watching another shift go understaffed. By the grocery store that won’t survive a $15 billion cut in food assistance.
So sure, keep telling that story about the Escalade in the parking lot.
But just know, while we’re all looking in that direction, the real damage is happening behind us. Quietly. Systematically.