OUR OPINION: Medicaid tax levy provides the intended state revenue

By NEMS Daily Journal

What a big difference three years and a lot of money make. The Mississippi Hospital Association, which fought tooth-and-nail in 2009 against a $200 million tax levied on non-Medicaid beds to draw down three times that amount from the federal government’s Medicaid fund, will not oppose extension of the tax this year if it remains unchanged.
The federal match is 3 to 1, which means $600 million for every $200 million in tax paid by the hospitals to the state for the Medicaid program. The Mississippi Division of Medicaid defines the program as “a national health care program. It helps pay for medical services for low-income people. For those eligible for full Medicaid services, Medicaid is paid to providers of health care. Providers are doctors, hospitals and pharmacists who accept Medicaid.”
“The mission of the Division of Medicaid is to ensure access to health services for the Medicaid eligible population in the most cost efficient and comprehensive manner possible …”
The hospital association and its leadership deadlocked with proponents of the tax, who included Gov. Haley Barbour and an unusual, bipartisan mix of legislators at the tail end of the 2009 session. The standoff almost sent the state into a new fiscal year without having adopted a budget for Medicaid. The consequences could have been harmful to health care for Medicaid’s 615,500 clients in our state.
The hospital association wanted the $200 million match to come from the state’s general fund, even then reeling from recessionary pressures, with Barbour insisting the state could not afford the draw-down from the general fund.
Medicaid’s total Mississippi budget is more than $5 billion, including federal resources. It is a major economic impact in our state, and supports the employment of thousands in addition to the care provided 20 percent of our population.
Hospital association chief executive Sam Cameron said this year the state cannot afford to pay the tax through the general fund. Gov. Phil Bryant said Tuesday he had told the hospital association he would support renewing the tax and that not renewing it would present problems in terms of revenue.
Cameron’s support hinges on maintaining a provision in the existing law that the hospitals’ Medicaid revenue would not be reduced if the state were forced to make budget cuts because of a revenue shortfall. His institutional self-interest is understandable, and it could be argued that reductions in Medicaid would worsen Mississippi’s already relatively weak employment situation statewide, which could reduce per-capita income, already the lowest nationwide.
Cameron’s position is reasonable, given Medicaid’s importance.

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