At the Capitol today, some health care advocates pushed for a higher “provider tax” to avoid health care cuts proposed by Gov. Tim Pawlenty.
The 2 percent tax — known as a “sick tax” in health care provider circles — is part of the funding mechanism for the Health Care Access Fund, which also uses premiums paid by enrollees of MinnesotaCare, the state-subsidized health care plan for low-income Minnesotans. The tax is levied on doctors, dentists, and other health care providers.
“MinnesotaCare is an excellent program providing coverage for the working poor in Minnesota and if it requires some additional tax on health care providers to keep those services in place, our members as a whole are willing to step forward and do that,” said Lawrence Massa with the Minnesota Hospitals Association.
If you didn’t know any better, you’d think the HCAF had run out of money, so the governor is imposing the cuts. You’d be wrong.
The Health Care Access Fund is one of the few dedicated taxes in Minnesota that actually works for the limited goal that spawned it. It works so well, in fact, that it often runs a surplus, which is why the governor and Legislature have regularly used it as a “slush fund” to balance shortfalls in the state budget, over the objection of the health care providers.
Last year, for example, the governor proposed pulling $149 million from the fund. Over his term, he’s diverted more than $400 million from the fund.
Writing in the Spokesman Recorder last month, Rep. Bobby Joe Champion criticized the governor for proposing the HCAF money go directly into the General Fund.
The governor wants to keep collecting the Provider Tax while diverting it away from the people it was created to help. That’s on top of the hundreds of millions of dollars that his administration has already shifted out of the fund to balance previous deficits. Those shifts have resulted in fewer people able to access MinnesotaCare and other programs.
Such a move would have allowed Pawlenty to spend the health care tax on anything but health care, and avoid the annual attention of raiding the fund. Tax bills emerging in the House and Senate, however, did not include Pawlenty’s plan.
The people Massa represents — hospitals — have a serious problem, to be sure. The Bemidji Pioneer’s Brad Swenson admirably describes the health care mess (registration required), partially created by years of shifting money from areas for which it was intended.
The situation is the underpinning of the coming showdown between the governor and Legislature. But its core is simple.
1. Health care providers pay a tax to provide health insurance for low-income Minnesotans.
2. The fund that provides the insurance often runs a surplus.
3. The governor diverts the surplus — and more — to other uses and notes the spiraling cost of health care, while cutting reimbursements to hospitals who end up providing care to those who can’t afford to pay for it.
4. Pressure builds to remove more people from health insurance coverage.
5. Proposals surface to increase the tax to provide health insurance for low-income Minnesotans, even though it ends up being used for something else.
The problem, of course, is exacerbated by the reality of the economy and the state budget which — even if the health care fund were used for other things — is still going to lead to major cuts in Minnesota health care.
Does anybody see a solution here?