PORTLAND — Oregon is holding a one-of-a-kind state lottery, in which the prize is health insurance.

Beginning this week, the state will start drawing names for the chance to enroll in an Oregon program, which was designed for the likes of students, the unemployed and the employed without workplace benefits — people not poor enough for Medicaid but too cash-strapped to buy their own insurance.

More than 80,000 people have signed up for a chance, but only a few thousand will be chosen.

Shirley Krueger, 61, signed up the first day.

It’s been more than six months since she could afford to take insulin regularly for her diabetes. That puts her at higher risk for a number of complications, such as kidney failure, heart disease or blindness.

But her part-time job leaves her ineligible for her employer’s insurance plan and with too little income to buy her own.

“I’m worried about it. I know it’s a death sentence,” Krueger said. “I won’t die tomorrow but I might lose my apartment tomorrow.”

What’s known as the standard benefit program was once a heralded highlight of the Oregon Health Plan and expanded coverage to many Oregonians who would otherwise go without.

At its peak in 1995, the program covered 132,000 Oregonians. But the state fell on hard times and the budget was cut.

By 2004, the program was closed to newcomers, and it now covers fewer than 18,000 people.

The program for low-income adults who do not qualify for Medicaid, it covers their most basic health services, medications and limited dental, hospital and vision services at no cost or up to $20 per month, depending on the person’s means.

Advocates say the plan helps to curb one of the most common problems among the uninsured — people making too much to qualify for other health assistance but too little to afford to buy their own insurance.

No state money is spent on the plan today, forfeiting much federal matching money. Taxes on hospitals and managed care insurance plans have propped up the plan for years.

That provides enough to keep it open to 24,000 people on average monthly. The state now has several thousand openings.

The health insurance lottery winners will be chosen in a series of drawings that could take a few months.

The lottery system was designed to give everybody an equal chance to be selected — so those who needed extra time or assistance to complete their forms would have an equal chance than they would in a first-come-first serve situation.

“This is such a wonderful opportunity,” said Ellen Pinney, director of the Oregon Health Action Campaign. “We’ve heard absolutely no complaints, just a lot of hope that they are the ones who will be selected.”

Pinney says many people on the list live in a state of constant insecurity about health issues.

That’s a feeling Krueger reiterates.

“It’s better than nothing, it’s at least a hope,” she said.

Advocates for the uninsured say the situation underscores the state’s need for health coverage answers. About 600,000 people in Oregon are uninsured.

“We have pretty much returned as a state, in terms the percentage of uninsured, to where we were in the late ’80s when we created (the Oregon Health Plan standard benefit),” said Barney Speight, director of the Oregon Health Fund Board.

The board, created by the Legislature in 2007, is supposed to come up with a plan to address health care access and coverage for Oregonians, expected by fall for consideration in the 2009 legislative session.

Gov. Ted Kulongoski considers the Oregon Health Plan as a basis to build on, said Anna Richter Taylor, a spokeswoman for his office.

The Oregon Health Plan has been able to maintain its benefit package for people who are aged, blind, disabled, under 19, pregnant or receiving Temporary Assistance for Needy Families benefits.

But providing coverage for a larger population is a solution that could take much longer.

“It’s a huge challenge for one session — it’s probably going to be a sequential process,” Richter Taylor said.

Speight says the board is cognizant of major national initiatives, such as one by Oregon Sen. Ron Wyden, but says the board is focusing on the state to provide the answer first.

“We don’t know, and the American public doesn’t know, what is going to happen in the next two to three to four years nationally,” Speight said. “There are things we can do at a state level that can work with a national model.”