SALEM, Ore. (AP) – Oregon will pay off half of its Medicaid debt through new taxes on health care providers.

Gov. Kate Brown on Wednesday approved a six-year tax on hospitals and insurance plans to help fund the state’s $950 million Medicaid shortfall. The move is expected to bring in over $430 million.

The state has been struggling to keep up with Medicaid funding after a drop in federal contributions. The governor hopes to make up the rest of the money through a tax on tobacco and e-cigarettes. She’s also exploring a tax on employers who don’t provide workers affordable health care coverage.

Legislative budget leaders say that without new revenue, Oregon will have to fill the rest of the approximate $450 million funding gap through its general fund.

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