A Senate committee approved a slightly altered version of the governor’s plan Tuesday, with only a handful of audible objections. A vote by the full Senate is expected Thursday, the same day Deal delivers his State of the State Address and just three days after lawmakers convened their annual session.
The question is how to preserve more than $450 million in annual federal support for the Medicaid insurance program, an amount large enough to account for as much as a third of what the state pays hospitals to treat Medicaid patients.
Senate Bill 24, blessed by Deal and sponsored by Sen. Charlie Bethel, R-Dalton, would empower the state Board of Community Health – which includes nine appointees of the governor – to establish assessments on hospitals to generate money that would then be used to claim the federal support.
Currently, hospitals pay an assessment on net patient revenue under a law the General Assembly adopted in 2010 amid sagging tax receipts that accompanied the Great Recession. But that law expires June 30.
Few if any lawmakers want to preside over steep payment increases to hospitals, physicians and other health care providers, moves that could force some small hospitals to close or curtail services. But, facing campaigns in 2014, many lawmakers are equally reluctant to extend the hospital industry tax that makes the existing Medicaid financing structure work.
Republicans in particular fear challengers labeling them as having raised taxes, and national anti-government activist Grover Norquist, a GOP powerbroker, has publicly urged legislators to abandon the levy.
The uncomfortable political dynamic was on display Tuesday as Bethel fielded questions from colleagues on the Senate Regulated Industries and Utilities Committee. The hearing was complete with a semantics debate over whether the plan is a “revenue measure,” Capitol-speak for a tax bill.
Minority Leader Steve Henson, D-Tucker, said “the clear legislative intent is to raise revenue.”
Besides the political implication, Henson and Sen. David Lucas, D-Macon, noted that tax and fee bills must originate in the House of Representatives. Henson and Lucas voted against Bethel’s measure.
Bethel answered Lucas: “It’s an authority bill” that merely empowers the state health board to decide the issue.
Yet earlier in his pitch, Bethel said, “This is a $689 million proposition,” the estimated total of the hospital tax and the resulting federal bounty.
The committee also adopted an amendment clarifying that the Assembly, not the board would appropriate any money that might be generated under the new model.
Hospital industry leaders initially proposed extending their current arrangement, with a few changes.
The industry now backs Deal’s proposal.