Georgia lawmakers resist hospital tax idea

ATLANTA -- Legislative budget writers today expressed their reluctance to imposing a new, 1.6-percent tax on hospitals proposed by Gov. Sonny Perdue.


The governor’s commissioner of community health testified before a joint meeting of the House and Senate appropriations committees this morning, almost pleading for passage of the tax to address a $506 million projected shortfall in next year’s budget.

“I do not know of another way to achieve $506 million on top of achieving growth (in Medicaid enrollment),” said Commissioner Rhonda Medows.

Federal prohibitions prevent the state from cutting back on the benefits or the number of people covered by Medicaid, a program for the poor run by the state with some federal funds. Rising unemployment and other lingering effects of the recent recession is swelling the rolls of people qualifying for the program on top of increases in the cost of providing treatment.

“Without new revenue, I don’t see how that can be accomplished,” Medows said.

House Appropriations Committee Vice Chairman Mickey Channell helped defeat the same tax proposal last year when federal stimulus funds were available. But those stimulus funds will be exhausted, he acknowledged.

“You have said we find ourselves in a box. I have looked at the budget, and I agree with you,” said Channell, R-Greensboro, considered by many legislators as the more knowledgeable member of the General Assembly regarding Medicaid.

Adding a tax of 1.6 percent on the revenues of at hospitals isn’t popular, he said.

“I’ve not had a long line of people knocking on my door saying that’s a great idea,” he said.

The tax would also be paid by health insurance plans in the state.

Medows said that 84 of the state’s hospitals would wind up losing money, but that the hospitals that treat the bulk of Georgia’s Medicaid patients would get an increase in payments because of the tax. She promised to release the list of winners and losers.



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