Newspaper article The Florida Times Union

Lawmakers Take New Look at Hospital Tax; the State Is Facing a $506 Million Shortfall for Medicaid

Newspaper article The Florida Times Union

Lawmakers Take New Look at Hospital Tax; the State Is Facing a $506 Million Shortfall for Medicaid

Article excerpt

Byline: WALTER C. JONES

ATLANTA - Legislators who rejected a 1.6 percent tax on hospitals and health-insurance companies last year weren't eager to hear the same proposal included in this year's budget, as was shown by questions during an appropriation hearing Thursday.

Community Health Commissioner Rhonda Medows told the hearing of the joint House and Senate appropriations committees that she can't find any alternatives to fill a $506 million projected shortfall in the Medicaid program.

On one hand, money is scarce with lagging tax collections, the exhaustion of federal stimulus funds and the end of money from the state's share of a national lawsuit settled against the largest tobacco companies. On the other hand, by accepting the stimulus funds, the state agreed not to reduce Medicaid benefits or the number of people eligible to receive them.

Plus, the state has cut all the expenses it can, she said.

"I have to tell you quite frankly, I don't see any way we can do any more of this where we can accomplish $506 million in this program," she told the lawmakers. "And that leaves the last thing to generate revenue."

State officials say taxing hospitals would "leverage federal funds" because the tax itself would become a cost that the state and federal government would have to include in what they pay the program. Of course, the state would merely be getting its own money back, but since the federal government pays roughly $2 for every $1 the state pays, the cost increase would bring in more money from Washington than Georgia.

A preliminary analysis by the Governor's Office of Planning and Budget shows that 39 hospitals would see a net gain with the tax, headed by Atlanta's Grady Memorial at $13 million, and another 39 would break even. But 84 hospitals would lose money, the largest being the private Emory Hospital in Atlanta at $10 million.

Health insurance companies would also pay the tax.

Legislators had plenty of questions about it, but they may eventually sink into a sense of resignation. The lawmaker Capitol insiders consider the most knowledgeable about Medicaid funding, Rep. Mickey Channell, vice chairman of the House Appropriations Committee, opposed the tax last year but was noncommittal Thursday in addressing Medows. …

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