Legislators spent just about all of last summer in a special session figuring out a way to fund the state’s $90-million obligation to Medicaid, the healthcare program that serves the poor, elderly and disabled.
Republican Gov. Haley Barbour proposed reinstating a tax on hospitals that would generate enough money to cover all the cost. The tax was in effect from the early 1990s until Barbour’s first term. Democratic leaders in the House, led by speaker Billy McCoy, D-Rienzi, and Appropriations Committee Chairman Johnny Stinger, D-Montrose, vehemently opposed the plan, labeling it a “tax on the sick.” The measure overwhelmingly cleared the Senate.
Finally, what amounted to an accounting error during former governor Ronnie Musgrove’s administration resulted in a refund from the federal government that picked up the tab.
Fast-forward eight months, and not much has changed. During the unveiling of his executive budget recommendation last week, Barbour again proposed that hospitals pick up the $90-million check for Medicaid. Not doing so this year, Barbour said, would result in every state agency having their budgets slashed by 5 percent on top of an additional 6.5 percent for fiscal year 2010. Plunging state tax revenues – April tax collections were $88 million short of an already-reduced estimate – stare legislative budget writers in the face as they restart the 2009 session.
“I think this is the first time a lot of legislators have seen the effects if we do not reinstitute the hospital tax,” Barbour said.
Stringer said his stance had not changed.
“I know it won’t pass in the House,” he said. “I don’t believe it’ll pass in the Senate. We’ve tried it during the special session last year and voted on it and failed, didn’t even get a simple majority. It requires a three-fifths vote and it can’t even get a majority.”
Barbour said there were three options when it came to Medicaid: tax hospitals to the tune of $90 million, cut the FY10 budget by a total of 11.5 percent or cut Medicaid spending by $571 million at a time when the rolls are growing. According to Barbour, 60,000 new people enrolled in the program in March.
“I don’t think most people think the hospitals ought to get a $90-million tax cut and all the rest of the state government take a 5 percent cut in their programs,” Barbour said. “When people look at it that way, I believe they’ll have a very different attitude.
“When you look at those three choices, I think the smartest choice is to reinstate the hospital tax. I don’t think the hospitals deserve a $90-million tax cut when they’re getting the benefit of all this money.”
Replied Stringer: “That’s his opinion. He has a right to it. I don’t feel like it would be that much of a cut (without the hospital tax). We’ve got a plan that we’ve been working on with the Senate that would provide level funding, maybe a little below, on some agencies, and some agencies will be above level funding. People just hate to tax sick people.”
The Mississippi Hospital Association has long been opposed to the reinstatement of the tax to fund Medicaid. Like everybody else, said MHA president and CEO Sam Cameron, the national recession is gripping hospitals.
“The governor’s budget calls for a $90-million tax on sick people,” Cameron said in a statement. “It amazes us that Gov. Barbour, Lt. Gov. Bryant, and (Senate Appropriations Committee Chairman) Sen. Alan Nunnelee, R-Tupelo, think hospitals are the only part of our state’s business community that is immune from the current economic crisis. Hospitals across the state are implementing staff and service reductions daily. They are also anticipating decreased reimbursement rates and increased cost shifting at the federal level. To tax sick people in these economic times is a sign of ‘sickness’ on the part of our governor and the Senate leadership.”