News
Critics pummel hospital tax
2/19/2010
Atlanta Business Chronicle - by Dave Williams Staff Writer
Hospital executives, insurance professionals and representatives of business groups Wednesday assailed Gov. Sonny Perdue’s plan to make up a Medicaid shortfall with a tax on hospitals.
Speakers at a public hearing on the proposal warned that the 1.6 percent “bed tax” would cost hospitals millions of dollars, forcing some to lay off employees and others to close their doors.
The hospital tax and a proposal to raise fees on insurance premiums charged by managed-care networks are the only revenue-enhancement measures the governor is recommending to balance a recession-ravaged fiscal 2011 state budget.
“We think it’s unfair to ask us to bear the full brunt of the state’s budget problems,” Julie Windom, vice president of the Georgia Alliance of Community Hospitals, told members of a House subcommittee considering the plan.
Representatives of doctors and health insurers also spoke out against the tax proposals.
Graham Thompson, executive director of the Georgia Association of Health Plans, said Perdue’s proposal to raise premium fees on health-maintenance organizations by 1.6 percent would cost the state’s largest HMO $19 million, more than three times the biggest hit on a Georgia hospital.
The result would be more Georgians without health insurance, Thompson said.
“Higher taxes means higher premiums, which means less utilization,” he said. Mike Sullivan, president of Southeast Sealing Inc. of Conyers, Ga., said his small business has been hit with double-digit increases in health premiums in each of the last three years and can’t afford further hikes.
“Where do I go to get another $3,000 a year to pay a tax I can’t pay now?” asked Sullivan, representing the Georgia chapter of the National Federation of Independent Business. “I can’t do it.”
The governor’s budget office has offered opponents of the hospital and HMO taxes a second choice to achieve the necessary savings: a 16.5 percent cut in Medicaid reimbursement to all health-care providers.
But many speakers at Wednesday’s hearing called instead for the General Assembly to raise the state’s cigarette tax by $1 a pack. Windom said that would generate $350 million a year in additional revenue, roughly the same as the hospital and premium taxes.
