The bill authorizes the state to continue levying a tax on hospital revenue for the purpose of shoring up the shortfall in the state’s Medicaid program.
The tax rate as originally passed in 2010 is 1.45 percent, which translates to $1.45 for every $100 that a hospital bills a patient, Tippins said.
Tippins said the alternative to levying the tax is forgoing federal matching funds and paying for Medicaid services through the state budget.
“So you’d be taking another $700 million out of existing state funding, and that would come from other agencies,” Tippins said. “You’re going to be hitting education very, very strongly, and all the other good services that the state provides. The reality is that money would have to come from somewhere because the state in their agreement to access the federal stimulus money cannot change the delivery pattern for Medicaid until 2014, so we’re locked in under the same eligibility and also under the same payment program.”
Grover Norquist’s Americans for Tax Reform group recently told the Atlanta Journal-Constitution that shifting authority to a state department, in this case the Georgia Department of Community Health, is nothing but an attempt to “absolve the governor and Legislature of any potential blame for the looming tax increase.”
But Tippins and state Sen. Hunter Hill (R-Smyrna), who also voted for the bill, disagree with Norquist’s assessment. Both senators said they would have voted for the bill whether it extended the tax automatically or whether it shifted the decision to the state agency.
“Look, nobody liked voting for this, but the bottom line is it’s something we had to do, it’s something our state needed to balance the budget,” Hunter Hill said.
Tippins said an advantage of allowing a state agency to levy the tax is that it can immediately terminate the tax if the federal government chooses not to continue with the matching funds. By comparison, the Legislature would have to be called back into session if the federal government made the decision to terminate matching funds outside the 40-day legislative session.
Jim Budzinski, WellStar Health System’s executive vice president and chief financial officer, emailed the Daily Journal, saying WellStar supports the bill. He said it will raise $689 million a year in state and federal funds to supplement Georgia’s cash-strapped Medicaid program.
“Although there is no direct financial benefit to WellStar through passage of the legislation, we view it as the best option to ensure a balanced budget that does not jeopardize the health of Georgians,” Budzinski said.
Yet, without the legislation, he said WellStar could face a Medicaid rate cut of up to 34 percent, which would equate to a loss of $50 million.
The Senate voted in favor of extending the bed tax by a vote of 46-9. The House is set to take up the bill later this month.
Last time the Senate addressed the bed tax, in 2010, it proved so controversial that state Sen. Judson Hill (R-east Cobb) was stripped of his chairmanship for opposing it. Judson Hill said he was ousted from his role as chairman of the Senate Reapportionment and Redistricting Committee in 2010 by Lt. Gov. Casey Cagle and his senate leaders.
Yet, Judson Hill voted for the bill last week, explaining why in an email.
“I have been asked, what changed in the three years since action on this important issue. It is simple – ObamaCare. ObamaCare is financially strangling all health care providers and jeopardizes the lives of all Georgians.”
Judson Hill said he saw his vote as a way to support doctors, nurses, and all health care providers across Georgia.
State Sen. Steve Thomson (D-Marietta), who voted against the bill, said the first time the bill was brought forward was by then Gov. Sonny Perdue.
“I just looked at that as the sick tax because I think that’s going to be passed on to the patient, not the indigent patients, but patients that can pay will end up having a tax increase on their hospital bills,” Thompson said.
The first time around, the hospital community was against the bill, Thompson said.
“It’s my understanding that the administration at that time, which was Perdue’s, threatened to take their sales tax exemption away, so three weeks later they came back down lobbying for it,” Thompson said.
Now the Senate wants to allow the Department of Community Health, a non-elected body, to charge the fee.
“It is an end run,” Thompson said. “Not going through the process, through the committee process, the elected process, and the voting process. I look at it as a department actually taking the powers of the General Assembly, which may be unconstitutional.”
Thompson said opponents of the bill said on the Senate floor there were other options than levying such a sick tax, but they were ignored.
Thompson said his fear is that lobbyists for all the dozens of providers from physicians to assisted living facilities, will now target the unelected officials in the state agency.
“My fear is this: if the Board of Community Health is going to decide on these provider fees, and they’re non-elected people, what’s to prevent them from being lobbied and the possibilities of mischief?” Thompson asked.
Kerwin Swint, a political science professor at Kennesaw State University, doesn’t believe there will be significant fallout for the Republicans who voted for the bill.
“I don’t think they’ll be in trouble,” Swint said. “Under the circumstances people are aware we have significant problems and not many good alternatives, and I think people like Grover Norquist don’t have the clout, him specifically, that he had, say, five years ago, because of the depressing conditions that all states are under right now.”
Tippins and the two Hills were the only Cobb senators to vote for the tax. Thompson and state Sens. Barry Loudermilk (R-North Cobb) and Horacena Tate (D-South Cobb) voted no.