Friday, February 13, 2009

Next they'll impose an extra tax on chicken soup and band aids

I'm catching up on my e-mail this week and I thought you would be interested in reading State Representative Kevin Petersen's (R-Waupaca) commentary from his newsletter regarding the proposed hospital tax:

Wisconsin – Taxing its Sick and Elderly

Last week, Governor Doyle, along with his Department of Health Services, touted a plan to increase Medicaid reimbursement to Wisconsin hospitals by approximately $300 million per fiscal year.

Under the plan, a 1.4% assessment would be levied on patient revenues at 72 hospitals. For every dollar Wisconsin assesses, it is anticipated it will be matched with $1.65 in additional federal Medicaid assistance.

Of those 72 hospitals assessed, 59 would end up getting more state aid for treating Medicaid patients. Thirteen will actually lose money in their operating budgets.

They are hyping this as an assessment. Don’t be fooled. Assessment is just another fancy term for tax. This time, the tax is going against people in need of hospitalization. In other words – a sick tax.

Currently, when taking in patients on Medicaid, hospitals around the state are reimbursed 55 cents on a dollar for Medicaid services. Referred as a “hidden tax” by the Wisconsin Hospital Association, this gap increases health care costs to you by forcing hospitals to shift the additional 45 cents in costs to higher expenses for your services paid for by private insurance.

This new hospital assessment - “sick tax” is planned to be 1.4%. Hospitals, like any other business, do not pay these added costs themselves. Who then, will be picking up the tab? As always, the answer is you. The cost will be charged to health insurers. Just like hospitals, insurers will shift their costs to their consumers – those purchasing policies.

Essentially, you will now be paying two hidden taxes. The first being the cost shift described above by the state not paying in full its bills for Medicaid services. And second, the higher cost of insurance premiums because the state is now mandating a tax on hospitals.

If by chance you still think imposing a sick tax is a good idea, go talk to the administrator of your nearest nursing home. Ask this question: “How well do you feel the nursing home bed tax is working?”

Beginning in the 1991-1992 Legislative session at $32 per month, the imposed bed tax was accessed on occupied nursing home beds. This tax was used to leverage federal matching funds for nursing homes in the same manner Governor Doyle is proposing the hospital assessment.

In his first budget, Governor Doyle increased the nursing home bed tax from $32 to $75 per month, assessed on all beds – occupied as well as unoccupied. Furthermore, in previous state budgets, the same provision which taxes our elderly in nursing homes also contains a clause that diverted millions of dollars to Wisconsin’s general fund to spend on unrelated government programs.

Presently, President Obama is looking to allocate $87 billion dollars of the approximately $1 trillion dollar bailout plan to states’ Medicaid budgets. Other states are seeking this additional Medicaid funding without a hospital assessment. Why then, is Governor Doyle proposing a tax on our sick?

The additional federal Medicaid money can only be spent on Medicaid related programs. In other words, Governor Doyle cannot raid the federal funding to spend in other areas of his budget.

By imposing a sick tax, the Governor can bypass the federal stipulation because he can now raid the money collected in the upfront 1.4% tax. For anyone that doesn’t think this will occur, you are already wrong.

As I had mentioned previously, only 59 of the 72 hospitals paying this tax end up with more Medicaid reimbursement. In the first year 13 hospitals lose money. It might be your local hospital that moves to the losing category in the next budget.

Shifting the burden to you the taxpayer as another hidden tax is not the way to dig our state out of its financial hole. Nor is the answer borrowing federal money against our kids’ future.

Priorities must be set. Medicaid funding is a priority. We must meet this priority by funding it – one dollar for every dollar it costs for the health care provider’s services. If Governor Doyle feels the state cannot afford these programs without raising taxes, you the taxpayer should know the truth and transparency of what his expanded programs actually cost.