About 650,000 Oregonians have no health insurance. Three million other Oregonians have access to health insurance, but at a greater and greater cost, to someone — employers, government, or themselves — every year.

What did Oregon lawmakers do this year about this institutional crisis? More than the U.S. Congress, which is where the national problem could be solved. But less than they could have.

Many health system reform proposals backed by Oregon labor organizations fell victim to opposition from the hospital, insurance and pharmaceutical industries.

“The profiteers in the health care industry have a hammer lock on the whole system,” said Arthur Towers, political director of Service Employees International Union (SEIU) Local 503. “So it feels like a huge victory even when we take a medium-sized step.”

On health care at least, medium-sized steps were what labor was able to achieve this year in Salem.

The most comprehensive was Senate Bill 329, a bill closely tracked by the labor-backed health-care-voter group Oregonians for Health Security that was signed into law June 28. If it fulfills the hopes of its authors, Senators Ben Westlund and Alan Bates, all Oregonians will be insured in a few years time.

SB 329, the product of a year’s work by a Senate task force, sets up a health insurance purchasing pool that any individual or group in Oregon can join and that uninsured individuals would have to join or face a tax penalty. The idea is to get a better rate from insurance companies by combining hundreds of thousands or millions of Oregonians into one giant purchaser. The insurance product they purchase would be closely regulated to guarantee certain minimum benefits, including preventive care, which would be fully covered with no co-pay or deductible.

Employers and labor-management health trusts could still offer their current insurance, or they could join the pool and pay the premiums for employees. Bates, the bill’s co-sponsor, says he thinks it will cost around $350 a month per person, but most of those who are currently uninsured will pay only part of that. The program would stretch federal Medicaid dollars so that everyone earning up to four times the federal poverty line would get some subsidy.

The bill passed handily in the House and Senate, with just 13 “no” votes among the two chambers’ 90 members. If it’s supposed to save money by cutting into insurance company profit margins, why didn’t the insurance industry oppose it? Because, Bates explains, they’ll make up for it in volume — right now the uninsured are a lost market opportunity.

None of this will happen immediately. SB 329 sets up a seven-person panel, with staff support, to work out details of how the program would operate. They’ll give a progress report to the Legislature in its special session next February, and then present the final program for approval in the 2009 legislative session. That’s when the tough vote will take place.

Another health care reform to pass this session was the governor’s Healthy Kids Plan, which would raise the cigarette tax by 85 cents a pack to pay for insurance coverage for all 117,000 of Oregon’s uninsured children. Lawmakers couldn’t get the three-fifths majority needed to pass the tax increase, and instead referred to voters on the November 2007 ballot. Medicare covers all those 65 and over. So if Oregon covers all kids 18 and younger, that leaves just 19-64 — 46 years — to worry about. It’s incremental.

Even more incremental is Oregon’s prescription drug bulk purchasing program (OPDP). It expanded this year without a peep of opposition from the pharmaceutical lobby, which fought its founding in 2003 and its expansion in 2005 and 2006. Now any individual or group can join Oregon’s pool and get a discount on prescription drugs. That’s what backers had started out proposing in 2003, but the pharmaceutical lobby was able to limit the pool to individuals over 54. After backers failed to expand the program in the 2005 session, they took it to voters in 2006 and got it broadened to local governments and uninsured individuals. Pharma must have given up: the proposal to expand the program to private businesses and health plans passed 58-0 in the House. It was easy to support something when it had no opposition, a Republican lawmaker told Oregonians for Health Security Director Maribeth Healey.