Hospital Tax Coming Back

This thing is like a zombie.  It won’t stay dead.

Democratic Gov. Jim Doyle today told members of the Wisconsin Hospital Association that he plans again to propose a hospital tax that could bring hundreds of millions of federal dollars to state hospitals and provide the government with $125 million to help it through trying economic times.

“We’ll be putting forth a new budget next January for the next two years, and when we do we’ll be working to make sure that that federal money is coming into the state of Wisconsin and we are working in a way to be able to raise the reimbursement rate that you have needed,” he said.

1. I really don’t understand some people’s opposition to this thing.  It brings in more than it lays out, and the hospitals themselves are fine with it because of that fact.  What exactly is the big hairy deal?

   Posted by scott on May 15, 2008 at 1841 hrs




2. Because it doesn’t bring in more than it lays out from the perspective of a taxpayer.  It will result in higher bills for people paying for services, because the hospitals will pass the tax onto the patients.  It results in more federal spending that the taxpayers have to pay for.  The patients/taxpayers get to pay more for health care and more in federal taxes so that the state can have more cash to spend.  Who are the winners?  The hospitals and Doyle.  The rest of us are paying the bill. 

   You act like federal money is free.  It isn’t.  We’re paying that too.

   Posted by Owen on May 15, 2008 at 1857 hrs




3. It will result in higher bills for people paying for services, because the hospitals will pass the tax onto the patients.

   I could be wrong about this, but I thought the hospitals themselves would be receiving increased payments.  So… what cost is it, exactly, that they would be passing on to us?

   It results in more federal spending that the taxpayers have to pay for.

   No, I don’t think that’s how it’s working here.  We’re already paying the federal government.  The question is: do we want to get something back, or do we want to leave the money on the table?  You apparently choose the latter, all for the sake of a rigid, unthinking no-tax-ever mentality.

   So those are your two arguments, if I understand you correctly, and why I don’t think they hold much water.

   Posted by scott on May 15, 2008 at 2020 hrs




4. I could be wrong about this, but I thought the hospitals themselves would be receiving increased payments.  So… what cost is it, exactly, that they would be passing on to us?

   They would be charged a state tax.  As a result they would receive more federal Medicaid money.  What are the odds that they eat the additional state tax and don’t take the federal Medicaid money to the bottom line?  Nill.

   You apparently choose the latter, all for the sake of a rigid, unthinking no-tax-ever mentality.

   No tax ever?  No.  I support taxes for the business of government.  We’ve long since passed the business of government. 

   The problem is that it doesn’t have to be this way.  There are states and municipalities all over the place that choose to spend federal dollars under the guise that “they paid in and deserve it.” The net effect is that our federal budget is exploding.  I reject that stance.  I realize that doing so may or may not reduce federal spending, but if all communities decided to reject federal handouts and pay their own way, it would go a long way to reducing federal spending.

   Posted by Owen on May 15, 2008 at 2030 hrs




5. What are the odds that they eat the additional state tax and don’t take the federal Medicaid money to the bottom line?

   I guess I’m not sure I follow your reasoning on this.  Can you be more specific?

   Your last paragraph is what I mean by “ideological reasons” as opposed to practical ones.

   Posted by scott on May 15, 2008 at 2045 hrs




6. I guess I’m not sure I follow your reasoning on this.  Can you be more specific?

   This proposal imposes a state tax.  The formula for Medicaid is that is the state put out, the fed will follow.  But the hospitals are not obligated to absorb the state tax.  They can pass it on t the patients and/or insurance companies.  The likeliest scenario is that the hospitals pass on the state tax completely to the patients, and take the subsequent federal monies to the bottom line.  The hospitals will make more money, but it’s the taxpayers/patients who will pay the bill.

   Posted by Owen on May 15, 2008 at 2104 hrs




7. Let me try to debunk the myth about this tax (and since Scott doesn’t think the argument should be ideological, I’ll make it practical):

   Federal MA reimubrsements are set by forumularies which are loosely based on a state’s MA constituency/population.

   If another state with a higher MA population comes along and institutes the same program, the Feds (who, believe it or not, do not have a bottomless pit of money) will reroute MA dollars to the second state (based on the formula), thus leaving Wisconsin with less claim to Federal MA dollars.

   So then, Wisconsin has now ratcheted up both general fund spending by $125 million, and will now be on the hook for an ongoing appropriation of roughly $325 million in increased MA payments that the feds can (and will) no longer backfill.

   Congress will eventually catch on to the scheme and adjust the formularies accordingly, because they don’t like the system gamed by the states.

   And now Wisconsin has $450 million in new expenditures and no corresponding revenue stream.

   This is on top of Owen’s point that Wisconsinites are paying out of both pockets for this, and the only winners are hospitals that have a significant MA constituency (hospitals who don’t serve MA patients, will not receive the increased MA payments and will have to pass the tax on to consumers - remember them?)

   Moreover, let’s suppose this program does continue and the swindle lasts for the next 20 years, the program faces the same funding challenges as Social Security and Medicare.  Aside from the general cash flow problems associated with those programs, the hospital tax run out to the horizon would worsen the state’s fiscal health.

   Because the baby boomers will eventually die off leaving less children to replace themselves, the hole will be exacerbated by less MA patients and workers to pay the bills…

   Posted by on May 15, 2008 at 2147 hrs




8. You know, you all go back-and-forth here making credible points. Even Scott, who “was fed-up with liberal bashing” and would never contribute again makes good points. But this is a tax. A tax is a tax is a tax; Diamond Jim has NEVER found a a tax he didn’t like. It’s as simple as that, and it’s going to happen. Screw the taxpayer is Wisconsin’s new motto.

   Posted by on May 16, 2008 at 0859 hrs