Objective: To describe the impacts of recent Oregon Health Plan (OHP) policy changes on individuals living with chronic illness in Oregon. Methods: A mail survey was conducted of 1374 OHP beneficiaries who were directly affected by the new policies. The analyses reported in this article represent baseline findings from the first of three survey waves in an ongoing prospective cohort study. Results: A significant association was found between Medicaid policy changes and high rates of disenrolment from the OHP. Compared to the non-chronically ill, the chronically ill were more likely to report inability to pay for medications, higher medical debt, more unmet health needs, and poorer health status. Among the chronically ill, those who lost insurance reported decreased access to and utilization of healthcare, more medical debt, and more restriction of medications. Discussion: As policy-makers restructure public programmes to accommodate tight budgets and rising healthcare costs, people with chronic illness can easily be overlooked. Chronically ill individuals face disproportionate financial and health burdens. Small cost-saving policy changes can lead to widespread disenrolment that cascades into reduced access to healthcare services, altered utilization patterns, and financial strain.