Feds Axing State Taxes on Medicaid Providers

By Glaser, Martha | Drug Topics, September 9, 1991 | Go to article overview

Feds Axing State Taxes on Medicaid Providers


Glaser, Martha, Drug Topics


Medicaid programs in more than half the states are facing an awful prospect. They may have to curtail their services to the needy, and in one state at least, there's even talk of a shutdown of the system.

The cause of the crisis is a federal-state struggle over who's to pay for the relentless advance of Medicaid costs, projected to reach $115 billion in fiscal 1992. The chief culprit is health-care inflation, according to a recent task force report from the Department of Health & Human Services and the Office of Management and Budget.

Federal mandates that have expanded Medicaid eligibility have not helped. Nor has the 1990 Omnibus Budget Reconciliation Act, which calls for manufacturers' rebates on drugs--but also opens up restrictive Medicaid formularies.

Sharing the burden: To cope with the ballooning tab for Medicaid, 27 states have adopted a device to have the federal government bear more of the burden. It works this way:

Because the Medicaid law requires the feds to "match" state funds for the program, some states realized that by increasing their own funding, they would pull in more money from Washington. These states adopted "voluntary" contributions from their Medicaid providers or a tax on providers, with monies funnelled to health care for the poor. The arithmetic can be especially favorable to poorer states that may draw close to $3 from the federal treasury for every $1 raised within the state.

Alabama is a case in point. Federal mandates added more clients to the Medicaid rolls and loosened up the restrictive drug formulary, thus adding to the state's costs. The rebates the state receives from drug manufacturers (under OBRA) "aren't really offsetting the increases in costs in the program," said Mitchel Rothholz, executive director, Alabama Pharmaceutical Association.

Alabama's way out: Voluntary contributions from hospitals serving large numbers of indigent patients. In January 1991, it switched to a tax on providers, which for pharmacies comes to 10 cents on every outpatient prescription. For every dime collected, "30 cents comes back from the federal government," said Rothholz.

(At the same time, the dispensing fee has been raised to $5. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Feds Axing State Taxes on Medicaid Providers
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.