In 1989 Oregon passed the Oregon Basic Health Services Act designed to insure that all citizens would receive at least basic health care. One part would expand Medicaid coverage to all residents below the federal poverty level. This would be done by prioritizing services to be offered on the basis of cost-effectiveness, and only offering those given higher priority (the top 587 out of 709 services ranked). A second part of the plan would require employers to cover employees and their dependents. A third would require the small insurance market to form an all-payers’ high risk insurance pool. At the time of enactment of the law, Medicaid in Oregon was only able to cover 58% of the population below the federal poverty level; the goal is to cover 100% of this population, even though coverage will be more “basic.” In 1991 the Oregon Department of Human Resources submitted to the Health Care Financing Administration (HCFA) a proposal to implement the resulting plan as a 5-year demonstration project to begin in January 1992.