The Georgia Senate voted Thursday to extend the hospital bed tax to lengthen the period of time the state of Georgia can collect revenues based on hospital patients and close a Medicaid funding gap of nearly $900 million.
Senate Bill 70, sponsored by Governor Deal’s floor leader Butch Miller, extends the hospital Medicaid financing program through 2020. The program was set to expire in 2017, meaning revenues would cease to be collected.
State Senator Jack Hill not only voted to approve the measure but was a co-sponsor of the bill.
The bill passed 50-3, with Senators Bill Heath, Josh McKoon, and Judson Hill voting NO. Three Senators did not cast a vote. The legislation moved through the upper chamber rather quickly, passing completely by the 12th legislative day.
The type of program is particularly popular in many other states across the country, but in Georgia, the health department collects an estimated $280 million each year from its hospitals by levying a 1.45 percent tax on net profits and uses the funds to draw down almost $600 million in matching Medicaid funds. The program does exempt psychiatric and state-owned hospitals from the tax, but can be very costly for others.
Hospitals that treat many Medicaid patients are particularly favorable to the tax which offers nearly double the taxed amount in matching federal funds. Legislators in favor of the program argue that rural hospitals depend on federal funding to keep their doors open.
Controversy has surrounded the legislation for years and long fought battles erupted when the tax was extended with much more resistance in 2013. Opponents have also called out the bills origination in the Senate, which is in direct contradiction of the state Constitution which dictates that revenue collection bills must originate from the House.
Additionally, limited government advocates like Americans for Tax Reform have long opposed these types of programs, stating, “States across the country should reject the notion that bigger government, more spending, and higher taxes are the only solution to any state’s policy priorities.”
Georgia was set to consider Medicaid expansion this year, however, the election of President Donald Trump and the uncertainty of the Affordable Care Act has put that initiative on hold.
The bill now heads to the House of Representatives where it will have to be passed out by a committee before a floor vote.
The short, but full, legislation is below.