Senate hearing considers redefining "rural" to preserve provider incentives for growing communities

Senate Bill 376, introduced to the Senate Committee on Health Care on Feb. 6, 2025, would change how Oregon defines "rural" for the purpose of healthcare provider incentives, using a percentage of the statewide population rather than a static population threshold.

Sponsor Suzanne Weber, a state senator who represents rural northwest Oregon, told the committee SB 376 would redefine rural to "constitute communities with 1.25% of the statewide population" so communities that have grown but retain rural characteristics remain eligible for loan repayment, tax credits and workforce supports.

"This will ensure that the communities who have begun to rely on this important program can can can continue to do so," Senator Suzanne Weber said.

Why it matters: Oregon's healthcare provider incentive program—formed under earlier legislation—offers loan repayment, loan forgiveness, insurance subsidies and workforce development to recruit and retain providers in rural and underserved areas. Proponents said a floating threshold would prevent communities that grow modestly from losing eligibility and disrupting provider recruitment.

Supporters' testimony and examples

Josh Balick, testifying for AllCare Health, described Grants Pass as a community that effectively lost rural designation after population changes and said a floating standard would give rural recruitment more stability. "So basically, what the bill does ... it changes it from a static definition ... to more of a ... floating number," Balick said, adding that rural provider recruitment decisions are driven more by payer mix than by small differences in population.

Henry O'Keefe, vice president of health care policy for the PacWest lobby group, testified on behalf of the Coalition for a Healthy Oregon in support of the bill.

Data and definition questions

Robert Dominguez, director of the Oregon Office of Rural Health, provided technical context and recommended clarifications. Dominguez said the Office of Rural Health uses Portland State University's Population Research Center for city and county counts and Claritas data for zip-code‑level population estimates. Using 2024 population figures, he said Oregon's population was 4,263,000 and 1.25% of that is 53,292.

Dominguez warned that a straight population percentage could pull in some larger cities unless the bill retained a distance-based buffer used in current definitions. He said that if the percentage alone were applied without the distance component, cities such as Lake Oswego, Oregon City, Keizer, Tualatin, West Linn and Forest Grove could be affected. With the distance buffers kept in place, he said the only community likely to be affected would be Lake Oswego, which would lose its buffer "making them that urban component."

Dominguez also recommended clarifying what constitutes a geographic region in statute—cities, counties or other units—because use of different geographic units can change eligibility outcomes.

How incentives work

Witnesses explained the existing tiered tax-credit structure that varies with distance to larger population centers. Josh Balick described the tiers in general terms and said he believed the closest buffer is 10 miles; he cautioned he was not certain of the precise distances. "If you're within 10 miles ... you get $3,000 ... between 20 miles and 50 miles, you get $4,000 ... outside of that, you get $5,000," Balick said. Committee members and witnesses agreed the bill's intent is to maintain current program recipients, not to expand the fund's reach.

Committee concerns and next steps

Senators asked whether the change would expand eligibility and strain the incentive fund; sponsors reiterated the stated goal is to "maintain what we currently got and not expand." Dominguez said he would run more detailed scenarios using county and other geographic definitions if the bill moves forward.

The committee closed the public hearing on SB 376 after testimony and questions. No vote was taken at the Feb. 6 hearing.

Notes: the healthcare provider incentive fund was created under 2017 legislation that witnesses cited as HB 3261 during testimony; witnesses asked the committee to preserve distance‑based buffers and to clarify the statute's geographic definitions before any change is finalized.